All Forum Posts by: Jim Kittridge

@Bryan Hancock I couldn’t agree more

That's helpful to understand. If you can find an asset or multiple that you are comfortable with, by all means, 1031 into them. Since you're coming from Seattle, you will find deals with better cash flow metrics in those markets. 

Having said that, don't sell a good asset and buy a bad asset just to avoid paying taxes. If you can't find something that meets your criteria, it's often better to just pay the taxes. 

A common mistake I see for new investors is that they focus on finding the highest projected IRR. Experienced funds are offering 10-15% IRR yet newer syndicators are offering a 20-30% IRR.

So how does a newer syndicator finding/executing deals with drastically higher IRRs?

There are three simple answers:
1. They struck gold and found the deal that nobody else could.
2. They are taking on substantially more risk.
3. They are making lofty assumptions.

How do you measure the risk-adjusted returns of a syndication or investment?

Hey, if it's done well and permitted, I can see it adding value there. That's roughly ~$40/sqft in cost and I'd expect it to get somewhere around $100-125/sqft for it.

Hey Brian, Charlotte is a great area and you can make just about any strategy work if you're willing to put in the effort. Historically, the surrounding towns have offered much better cash flow but that gap has narrowed over the last 24 months.

Your strategy really depends on your situation and goals. If there was a clear winner, everyone would gobble up those opportunities.

Hi Jack. Michael's response is spot on for your taxes. Are you looking for advice on whether to 1031 into another rental vs alternatives? 

Obviously the market is hot right now so finding a decent deal to 1031 into is difficult. 

Hey @Account Closed, I would recommend hiring an experienced NNN broker to consult with you and to represent you. You can ask them to do a fixed fee instead of managing the deal throughout its lifecycle.

@Rio Bundez ROE is a great metric. If you sell, you’re going to have a large tax from capital gains. You could 1031 it, but it’s hard to find a good asset to exchange into in this market.

Like others have said, I would look into a cash out refi or a HELOC. You can retain the benefits of principal pay down, depreciation, appreciation and you can still cash flow albeit much lower.

Personally, I would rather do a cash out so I don’t have to worry about it being called, but that’s me. Plus rates are very low right now.

Happy to help. I would look at LoopNet and Crexi as well. You can also look at the big CRE brokerages like JLL, Cushman, etc. With a little searching online, you can probably find a few shops that specialize in NNN deals near you. We have a few in the Carolinas.

Also, I’d recommend considering expanding you geography. NNNs are as close to passive as you can get without being an LP. 

@Christopher Porter Thanks. The flipping and rental business is fully streamlined so it doesn’t take much time. We started to invest more resources in storage as we can get to scale quicker. It’s impossible to buy 50-100 SFRs at the prices we want in this market and I don’t see that changing.

One thing to note, owning and operating SS facilities is not passive. It’s an active business with real estate.