All Forum Posts by: Douglas R.

Also, what qualities/background should one look for in an agent for this type of transaction?

Hi, everyone. This is just to get a sanity check on an idea. After paying off the debt owed on a property I will be getting $7.6m in six months and am considering using that in a 1031 Exchange as a down payment on a $25-$30m loan to purchase a portfolio of apartments. I am thinking three apartment buildings (professionally managed Class B/B+, Cap Rates 7+, 95% or more occupancy rate) each located in a solid neighborhood in a separate city in NW Washington (one in Seattle, one in Bellevue, and another in Olympia or Tacoma). I wouldn’t need to derive personal income from these investments, as I would put all profits into servicing the debt more quickly and/or investing back into the buildings. I am somewhat nervous about taking on such a huge amount of debt, though, even if the down payment does afford some cushion. Do you think a little over 25% down payment would be sufficient for a potential $30m portfolio purchase? And does a 1031 allow for such a “down payment” arrangement? Thanks!

Thanks, everyone! Apologies for the delayed response, your feedback is very helpful.

Good evening. I purchased 1,772 acres of Oregon dry land wheat acreage in late 2014 and since then it has significantly appreciated in value (approximately 800%) owing to newly-available irrigation and the fact that it is ideal ground for potato production. I will have the option to sell for around $8-9m in about a year and have already been approached by two prospective buyers.

I am thinking of a 1031 Exchange and wanted to ask your advice: if you were in my position and wanted to support your family with a safe, reliable income-producing real estate investment what path would you take? I am attracted to the idea of just buying more agricultural land and leasing it out to a producer for a share of the crop, as it seems safe, but realize that there may alternatives outside of ag that have the potential to net $500k or more annually from a $8-9m investment. Location and other particulars do not matter as much as ensuring reliable income.

Thanks! Have a great weekend.