All Forum Posts by: Cindy Cheng

Hi Mark!

I thought LLC's can only do a 1031 exchange if they terminate the LLC? Those exchanges are called Swap and Drop/Drop and Swap. They're more complicated and take longer to fully conclude. If there's another method, please let me know.

I also have a property under an LLC (my husband and I are only members) that I want to do a 1031 with. I was also told by my cpa that transferring the property from the LLC to our personal names will trigger a tax event.

Thanks for the insightful advice, I appreciate your honest opinion. Perhaps, it's a little late to enter the San Antonio market now to truly get decent gains. Tax properties going up every year is pretty common up here in the Northeast (NY, NJ & PA); but our property values (tax basis) also go up slightly. I thought Texas had some property tax cuts in 2023? Did that not help? Or is that something you have to fight for, as you mentioned? I had planned to visit San Antonio in the fall to see some properties but haven't quite planned out the areas yet. Perhaps I should put my money elsewhere...I know mid-western cities and college towns had some great rental occupancy last year. Any specific cities you were thinking?

Quote from @Seth Teel:

@Cindy Cheng

Tobin Hill is a great neighborhood. There is decent diversity in house stock; so you could invest in SFRs, duplexes, 4-plexes, and small multi-family. Over the last decade the property values have risen significantly. This may affect your ability to hit a desired cap rate or monthly cash flow. That being said, it's likely the area will continue to appreciate given its location relative to Downtown and The Pearl, and all of the Lower Broadway redevelopment. From a rental perspective, it is a desirable area for tenants, due to its walkability, proximity to the St. Mary's Strip, and several universities (SACC, Trinity, UIW, etc.). I've owned property there off and on over the last 13 years, and would welcome an opportunity to invest there again. If I were to do so, I'd definitely look for small multi-family as opposed to SFRs, unless you're wanting to create a short-term rental(STR). That opens another can of worms. Let me know if you need more info on STRs and the City's ordinance.

 Hi Seth,

Thanks so much for detailed input and insider's insight. Looks like it's the type of investment that is more for long term appreciation and not quite good cash flow? With the housing prices skyrocketing almost everywhere coupled with highest interest rates we haven't seen in decades, any area that has good rental potential is so hard to get good cash flow!

I manage my own STR's in PA and don't really want to have property managers for STR's because it's a market that requires more attention to details. So that won't be doable for me, for now. I want to start off with a decent LTR first. Do you recommend any other area in TX that has decent purchase prices around $300-$350K and can rent for $3K?

Quote from @Justin Brickman:

$300-$400K range 

- Northeast - (anything in the Reagan or Johnson school district. Thousand Oaks, Stone Oak, Encino Park, Bulverde, etc)

- Schertz/Cibilo (not far from military bases, easy access to Austin/New Braunfels, up and coming/ many new nice neighborhoods)

$250-325K Range

Northwest - (Near UTSA, Medical Center, Shavano Park, Rim)

$200-275K Price Range

Far West - Castroville, Alamo Ranch, Sea World Area

Hi Justin!

thanks for posting this summary! Do you also know the average rental rates for each area? Where do you think has less saturation and more opportunity for LTR?

I’m looking to invest in a SFH LTR to start with in San Antonio or Austin but I’m afraid of getting something in an over saturated market. I’m also in the northeast so I want something that is turnkey and accessible to property managers. 

Quote from @Seth Teel:

@Sean Byrd

Tobin Hill is a great area.  It's actually where my office is located.  I have lived in and owned property in Tobin Hill over the last 9.5 years.  I currently live in an adjacent neighborhood.  

Pros for the area:  Location & proximity to Downtown, the Pearl, Brackenridge Park, the Museum Reach, 7 mins to the airport, and walkable to San Antonio Community College.  There are also plenty of great bars, restaurants, and shops in the area. There is a good sense of community and a strong neighborhood association.  The area will continue to appreciate.

Cons for the area:  Property taxes keep going up. If your property is too close to N. St, Mary's strip you will likely have parking issues, noise issues, and late night meanderers.  Recently there have been some issues with drunk driving (primarily on The Strip).  There has been a slight uptick in the homeless population since the pandemic started, but they are usually pretty harmless.  Reading on Nextdoor app, it seems that most complaints are about the noise and property crime. 

Hope this helps.  DM if you have specific questions.

Hi Seth!

Thanks for posting your reply to Sean. I wanted to pick your brain about how the area has been since? I’ve been on the fence about investing in Texas since I’m very far away, on the northeast but I think it’s a good area to invest in. I did some research using Zillow and realtor.com to see if there’s over saturation, average prices for purchase and average rent. I stumbled upon Tobin Hill as there doesn’t seem to be too many rentals older than 30 days listed and it’s near downtown. 

Do you recommend investing there now, and why or why not?

thanks so much for your time!

I completed a 1031 exchange in 2023. I understand that PA finally conforms to Fed IRC 1031 eff 1/1/2023. I'm filing my taxes using TurboTax and completed form 8824 for Fed purposes. When I get to PA taxes, I see the deferred gain in Schedule D of PA-40 which is recognizable and producing a tax liability. It has my deferred gain amount as "Gross sales price less expenses of sale" for some reason. But the bigger question is how do I let PA know it was done properly as a 1031 exchange and the gain should be deferred?  Nowhere on the form does it even mention deferred gains or like-kind exchanges! I looked up the most recent form online and visited the state's website and it does mention that starting in 2023, PA conforms to Fed IRC 1031 but it does not say HOW to report it.

Can someone PLEASE HELP?! THANK YOU IN ADVANCE!

Congrats on the opportunity Douglas! I'm curious to know the outcome.

I am also looking to perhaps invest in a LTR (either townhouse or multifamily) Northern Liberties/Fishtown area. I am a bit concerned about crime and vacancy in the area and in all of Philly though. Do you see any of those being a concern today and the near future?

Hello BP!

I own and manage STRs in Poconos (PA). I’m currently selling one of them and using a 1031 exchange to replace it with a new investment. I’m considering using the funds to get my first Mixed-use or Multifamily LTR and was considering Philly. I know there are many different areas and can be drastically different. It’s about 2 hours from where I live so still somewhat manageable. I noticed there are a lot of vacant rentals on Zillow and many of them are those high-end apartments with amenities. Is the market their oversaturated? 
My goals are to wisely use the funds to invest into something that will create cash flow with cap rate of at least 5/6%, appreciate over time and be in a safe neighborhood where tenants are much less likely to be late or not pay. I can get a property up to $850k. Any great advice would be appreciated! I want a neighborhood where there’s job growth and a variety of type of jobs. If there’s another city you can recommend, I’d greatly appreciate it as well!

Thanks!

Quote from @Eliott Elias:

It is not realistic to cash flow in houston with a LTR in a good neighborhood (A-B class). Look into multifamily, 2-4 units. 

 Thanks Eliott. Do you have any areas that you recommend for a 2-unit MF?

Quote from @Edward Adams:

When it comes to real estate investments, it's important to conduct thorough research and analysis to find suitable neighborhoods that align with your goals. While I can provide some general information, keep in mind that real estate markets can change, and it's always a good idea to consult with local real estate professionals for up-to-date advice.

Houston and Las Vegas are both cities with diverse real estate markets that offer potential for investment opportunities. Here are some neighborhoods in each city that you may consider:

Houston:

1. The Woodlands: A master-planned community with a strong rental market, excellent schools, and a low crime rate.
2. Katy: Known for its good schools, suburban charm, and proximity to major highways and employment centers.
3. Sugar Land: A highly desirable suburb with good schools, amenities, and a low crime rate.

Las Vegas:

1. Summerlin: A master-planned community with a range of housing options, amenities, and proximity to the Las Vegas Strip.
2. Green Valley: A well-established neighborhood with good schools, parks, and shopping centers.
3. Henderson: A suburb with a lower crime rate and a variety of housing options, including condominiums and single-family homes.

Remember, it's essential to research crime rates, rental demand, vacancy rates, and potential rental income in these areas. Additionally, consider working with a local real estate agent or property management company who can provide insights into specific neighborhoods and help you navigate the market effectively.

Lastly, always conduct thorough due diligence and analysis before making any real estate investment decisions.

Thank you Edward! I did take a look at some listings on Zillow in all of the areas you listed for Vegas previously. Those are indeed great neighborhoods! However, it's quite hard to find nice ones around $300K, and almost all of them are in a HOA and the HOA fees really cut into the returns! I'd prefer a SFH than a Condo but maybe with my budget, that is a slim chance! The rental income looks decent there as well. But inventory is just so low! Hence, why I might consider Houston instead. Thanks for your tips, most definitely will always try not to walk into anything blindly. I just wish there was a list of neighborhoods in the US to do a LTR with XYZ returns (non-cash) with XYZ risk, I'm sure there's a few out there but you just never know how accurate it is. I am just doing a lot of research on different areas based on what I read but feel like it's pulling me in different directions even more. I like to make a decision and move forward to execute it.