All Forum Posts by: David Charles Edwards

 There is plenty of middle ground. Owning 2 is significantly less headache than owning 15. 

Hey, I said "relatively low"! lol - definitely did not mean to insult, but show you an option.

Managing a tenant/unit takes the same amount of effort, regardless of how much the rent is. Actually, you typically have more headaches with lower-rent tenants.

So why would you not want to manage half the units for the same revenue?

@David Charles Edwards to reinforce your preference to not move around a lot, making your rentals your primary residence won’t get you that far. If you rented the property first, you’ll have to pro-rate the gain based on non-qualified use. For example, if you rented for 25 years and then lived in it for 2 years, the capital gain exclusion you’ll be eligible for is 2/25 of your gain. You’re also on the hook for depreciation recapture, which is likely larger than your cap gains.

You can consider 1031 into a DST to simplify your transactions. Then you can 1031 your DST into a single property and figure what you want to do with that property.

Those Annuities don't sound great, 6.4% yield if just you on the policy and only 5.8% if you add your wife to inherit the policy if you die someday (sorry but high likelihood, nothing lasts forever)

consider as recc above, find a few good syndicators with several upcoming deals you can identify within 45 days of the sale of your condos (sell all 15 as a package to some investor), then invest as a TIC, tenant in common, with one syndication deal, there won't be any fees, then make sure it's a longer term 10 year at least investment, then keep rolling until death. Then kids get the step-up. I recc NNN-multi-tenant large shopping centers that due cost segregation analysis at purchase to get maximum depreciation up front. CRE retail has good fundamental outlook next 5-10 years due to lack of supply. This segment has been big picture stable last 100 years. Also, multifamily (now down 30%) but wait 1-2 more years for massive new supply to be absorbed. I just invested in 3 different Data centers, they are too high risk for most people to consider, especially in retirement. Industrial is great too, long term, but a little overpriced still for now.

or sell, pay the taxes, invest in VOO, get 8-10% next 30 years, or invest in REITs, get 10-12% next 30 years

or buy MUNIs, i'm getting 5% tax free, which is an effective yield of  7.94% for part of my emergency fund

If you die 1 day , 1 yr, 1 decade after you sign an Annuity, they keep all your money, your wife/kids get nothing, unless you add them, but then the returns do go way down and they were low to begin with, Remember the Annuity company is investing in VOO and last 20 years got 13% a year, (long term 8.4% since 1801) they pay you 6 and keep the rest, good luck brother :)

 I have the same setup as you. Don't overthink it. Maximum liability coverage and a good umbrella policy is going to take care of 99.9% of your needs and exposure. As far as your kids, that's easy too - set up a trust and move everything into the trust. 

Real estate is best served by holding it forever, at least the way our current tax system is designed. 

You have a relatively low value and rent per unit. Another path to consider is to sell them under a 1031 exchange and trade into higher-value real estate. Double value, double rent per tenant. Maybe finance 50-70% and hire PM.

I would stay in real estate, it is hedged against inflation and you can consume part of the cash flow instead of depleting equity, you can actually let the continue to grow. Personally we have long stopped buying "doors" - we want as much revenue with as few tenants as possible, so we buy higher-priced homes in the Milwaukee suburbs.

Last suggestion: look into DST's. You can 1031 into a DST and avoid taxes.

 I have the same setup as you. Don't overthink it. Maximum liability coverage and a good umbrella policy is going to take care of 99.9% of your needs and exposure. As far as your kids, that's easy too - set up a trust and move everything into the trust. 

Real estate is best served by holding it forever, at least the way our current tax system is designed. 

I'm not referring to a HELOC, since you normally don't get those on investment properties - I'm talking about straight up mortgages on the property. Read up on equity harvesting here and elsewhere, but yes you get the general idea in your last paragraph - cash out, let the PMs deal with the properties, rinse and repeat every 15 (or 20, or 30) years. Yes, you have to open up a little bit from the Dave Ramsey mindset which works great for people on the edge but not very well for investors or those with money.

Even at 8.5%, as long as everything gets paid for it's largely irrelevant. If rates fall significantly, refinance. Now if you don't need or want the extra income, then you can just leave thing as is, but then there's also little compelling reason to sell and take the tax hit. 

I think he is referring to a HELOC, but ultimately it is a way to avoid or defer capital gains taxes as the interest rate on the HELOC would be lower than your capital gains tax. You're getting the equity, 80-90% per property per loan, upfront and trading the capital gains for interest which is deductible.