All Forum Posts by: Greg B.

your cap ex (10%) and vacancy (8%) seem a bit high to me.  any reason for those numbers?

@Kyara Schroeder +1 to the BP calculators.  You can fill in all the details and then share the report with the community to get some feedback on the numbers.  use rentometer.com to determine what you can rent the other side for.

oh, and you get a few free uses on both (BP calc and rentometer.com), so give it a go!

@Elenis Camargo out of curiosity, was there an inspection done during acquisition?  I'm somewhat new to the process, but it seems that a roach problem would have been noted in that step.  However, it may not have changed anything other than knowledge of the problem before the tenant contacted you.  

Thanks for any input.  I'm looking to get into some new acquisitions after being out of it for awhile, so information is helpful.

Dave:  Are there any minimum time limits before doing the post exchange refi?  eg, if I do it simultaneous with closing, or even a few days after, that might smell like boot to the IRS.  Is there a seasoning period, such as three months, that is viewed as a safe time passage?

Thanks Jeffrey, that was my hunch (that it would be boot).  I'd loop in an intermediary before proceeding, but am trying to pull a strategy together first.

I have a question about 1031 exchange financing.  I'm selling a building in a very hot market, and it's going to be difficult to find enough replacement property in time to meet the deadlines.

One strategy that I'm considering is to put extra down on the replacement properties and then get that money back with a HELOC. The purchase price of the replacement would be greater than the sales price of relinquished, as would the loan amount. The "extra" money paid down would use up all the proceeds from the relinquished property.

eg:

eg, if I found a replacement property for $600,000 and put 40% down:
loan = $360,000
down = $240,000

at closing, also get a HELOC of $90,000

Total loan = HELOC + Loan = $360,000 + $90,000 = $450,000
LTV after HELOC = $450,000/$600,000 = 75%

I would then draw on the HELOC later for renovations/other properties.

I talked to my mortgage person, and it's allowed from her perspective if the loans are simultaneous at closing.    Is this in violation of 1031 exchange rules?