All Forum Posts by: Jason Woods

I haven't been checking this site for the past couple of years, and I missed a few messages sent to me.  A few folks asked about what I did with my profits, I ended up with option #1, just took profits and paid tax, it worked out well. 

Thanks all for your input, very much appreciated.

I don't need the cash, but my partners wanted to sell so we're selling the property.  We've had a good run, property value almost doubled since we bought a few years back. 

I don't want to spend time to buy another investment property and manage it myself, I want to spend my time on other things, that's why I've been looking at other passive options. I've been looking at DST 1031 exchange, it's just seem so complex, the fee is also high, as Christopher mentioned.

Opportunity zone fund is attractive to me because I only need to invest profit (smaller portion), tax defer is good enough for me, I expect to be lower tax bracket in 10 years.

My biggest challenges is to find the investment managers I can trust.  I'm totally fine paying them if they're good and can provide value to me, but I find a lot of them lack either integrity or capability, sometimes both.  I have to spend a lot of time on identifying the right managers and deals, monitoring them, which isn't my idea of passive.

On the plus side, if I can figure out DST 1031 and find trustworthy managers, I can rinse and repeat with my other properties with the same process. I probably won't be very excited with the returns I could get from them, I got lucky in the past decade and have had a great run doing it myself.

Hi All,

I have an investment property I'm selling in the next couple of weeks, which I bought in 2016 with $250k, expect to get $400-450k after expenses, with capital gain of $150-200k.  I'm looking into options on what to do with the funds.

1. Take the cash and pay tax on capital gains ($150-$200k, could be more with the depreciation recapture in the past 5 years)

2. Do a 1031 exchange and defer tax. I don't want to buy and manage another property myself, so I've been looking into DST 1031 exchange which I can buy ownership and have other people manage it for me. Has anyone had experience doing that?

I've been looking at 1031crowdfunding.com website and their deals, has anyone used this site? Would you recommend them?

3. Take the profit portion from the sales and invest them in an opportunity zone fund, again I'm looking at the deals on 1031crowdfunding.com, any experience sharing would be much appreciated.

Given my case, which option would you recommend?  What're the pros and cons of each option? TIA!

Jason

I'm very interested in this, has anyone done this previously? Can you share your experience? 

@Julie Marquez thanks Julie!

This market surprises me. I can’t imagine housing market going this strong in midst of lockdown, 15% unemployment rate and GDP down 35% this quarter by estimates. There is probably more money to be made if I wait a bit, but I’d rather take profits and hold cash now than getting an extra 5% gain.

@Brady Watkins

Yeah appraisal, and to a large extent, mortgage is going to be an issue. Banks are tightening up lending, a precaution which is probably the right thing to do for the banks, but it’ll kill real estate market.

My buyer is putting up 40% down payment, I hope their mortgage application can go through fine.

What kind of buyers do you see are still buying? Banks are tightening up lending, a lot of buyers couldn't get mortgage now, the high end housing (>$2M) are moving very slowly these days.

@Sue you're absolutely right, current situation is invalidating a lot of previous assumptions, college student rentals, reliable income from rent (heck, you don't need to pay any rent in Seattle for at least 6 months).

I'm trying to sell a couple of properties and raise cash. There is a huge disconnect between the economic impact and housing market/stock market, this could go on for a couple of years, but I believe it's evitable housing price will come down substantially in the next couple of years. 

I just accepted a full price offer on a property we listed 5 days ago in the Bellevue/Eastside of Seattle area. This is a property we acquired a year ago, it's a fix-upper in a conveniently located neighborhood, the project took much longer than we anticipated, and with a quite a bit of budget overrun as well. I have been watching local RE market very closely in the past 2 months as we are finally getting ready to sell. With all the lockdown, stock market crash, and many folks got impacted and lost their jobs, I was getting nervous.

So last weekend we decided to take the property to the market, before the government lockdown is lifted. RE is considered essential business and it's allowed to have people tour the house with PPE and social distancing. It's a really weird time to sell a house, it'll be one experience for history books :-). We listed property and received a full-price offer 4 days later, and we reach mutual the next day. I was quite nervous going in and wanted to get the property sold asap, so I was pleasantly surprised to see the RE market is still going so strong in Seattle area. Even during the midst of lockdown, we had many groups touring our property over the course of 5 days. I didn't see price drop at all, it probably went up 5-10% YOY in the area our property is located. There are definitely less buyers given the covid-19 situation, but there is very few houses available for sale as well, so whatever are in the market all got sold pretty quickly. I will make ~10% net profit from the sale.

I think the housing market will retreat in Seattle area in the next 1-2 years, the full economic impact of the virus and lockdown is not yet showing up in RE market yet. That's why I was nervous and want to sell quickly, I want to get some funds back as cash and have the dry powder to load up if another crash comes.

I just accepted a full price offer on a property we listed 5 days ago in the Bellevue/Eastside of Seattle area. This is a property we acquired a year ago, it's a fix-upper in a conveniently located neighborhood, the project took much longer than we anticipated, and with a quite a bit of budget overrun as well. I have been watching local RE market very closely in the past 2 months as we are finally getting ready to sell. With all the lockdown, stock market crash, and many folks got impacted and lost their jobs, I was getting nervous.

So last weekend we decided to take the property to the market, before the government lockdown is lifted. RE is considered essential business and it's allowed to have people tour the house with PPE and social distancing. It's a really weird time to sell a house, it'll be one experience for history books :-). We listed property and received a full-price offer 4 days later, and we reach mutual the next day. I was quite nervous going in and wanted to get the property sold asap, so I was pleasantly surprised to see the RE market is still going so strong in Seattle area. Even during the midst of lockdown, we had many groups touring our property over the course of 5 days. I didn't see price drop at all, it probably went up 5-10% YOY in the area our property is located. There are definitely less buyers given the covid-19 situation, but there is very few houses available for sale as well, so whatever are in the market all got sold pretty quickly. I will make ~10% net profit from the sale.

I think the housing market will retreat in Seattle area in the next 1-2 years, the full economic impact of the virus and lockdown is not yet showing up in RE market yet. That's why I was nervous and want to sell quickly, I want to get some funds back as cash and have the dry powder to load up if another crash comes.