All Forum Posts by: Joe Vesey

I need to place 1M in cash and at least 650 in debt to satisy my 1031. I'm in week 3 of 6 for the id time period. I have a trailing collateral lien attached to my 1031 so the replacement property can not be a syndication, but can be a TIC if the other TIC member agrees to the collateral lien. I just want a passive investment and would partner with a strong operator. I'm a strong borrower so can likely buy up to 4M. I'm in the car wash business currently, but am a serial commercial investor and any commercial investment that makes sense and is ready to close soon is good. Let me know.

Hi Eileen,

I assist accredited 1031 exchangers into passive investments. Please let me know if you'd like to have a discussion to see if we may be able to help. Thanks!
Joe

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Quote from @Janki Patel:

Thank you @Joe Vesey. A follow up question I had was, does the tittle and deed need to be 50% in each partnership name ( 1031 investors and new investors) or can a new joint partnership be created with each group as 50% each owner to hold the property?

If you create a new partnership then you are not meeting the same taxpayer requirements of the 1031 exchange. Some exchangers change how title is held on the replacement property once the exchange is "old and cold." ALWAYS discuss w your tax advisor.

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Yes, if your partnership remains intact (how you sell is how you have to buy), and you structure it is tenants in common with the new ownership on the replacement properties. You would each own an undivided 50% interest as tenant in common. Your 50% value would need to be equal to or greater than the value of your relinquished properties (same with the debt that was paid off if any) @Dave Foster can provide more guidance. Good luck

2 Votes

Quote from @Daryn Dockter:

A 1031 Exchange only defers the capital gains tax. The capital gains just go into the next property, they don’t go away permanently. My understanding is the only way to truly avoid capital gains tax is to pass on the property to a beneficiary through a trust. But I don’t want to pass anything on. So is there any way for me to eventually sell and avoid the capital gains tax?

Depending upon your ultimate goal - you have options. Accredited investors will sometimes look at a "2 step DST to 721 UPREIT" that is viewed as a final step (no more 1031 exchanges). Send me a note if you'd like to discuss in more detail.

0 Votes

Sioux Falls, South Dakota

I assume you are in the Metro? If you are, you should connect with Jadde Rowe. Great agent and even better person.

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Quote from @Benjamin Aaker:

Give them your price as option A. Option B is their price with the difference being seller financed.

Seller financing does not (in general) work well with 1031 exchanges. Possible, but not the easiest structure.

0 Votes

Portland, Maine

I have used Endurus Capital and I know them pretty well. Some offerings MAY be offered to non accredited investors, but it is not typical.

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Quote from @Alberto Cioni:

Soon I will sell my 1.3M rental propriety and I'm looking to 1031 into a DST. One of the biggest complaints with DSTs is the high cost/fees associated with them. A big part seems to be the broker commission (8-12% from what I have seen). Is it possible for an investor to work directly with a DST sponsor and "save" some/all of the commission that would have been paid to a broker? It's a pretty big chunk for the amount I'm looking to invest.

Any suggestions would be appreciated.

Albert,

We are a fee only advisor that specialize in passive investment solutions for 1031 exchange clients. Please send me a note if you'd like to discuss how we may be able to assist. Thank you,
Joe

0 Votes

Los Angeles County, California

Yes, but it cannot be in an LLC as then the taxpayer would be different on the purchase side vs the sell side of the 1031 exchange. You could look at going into title as tenants in common where you each own an undivided interest in the real estate. Definitely discuss w your tax advisor too.

1 Vote

Quote from @Dan Becker:

Hi All,

I am looking for deal structure suggestions on a unique situation that involves a home held in trust.

I have a seller who owns and rents out an SFR that has an FMV of $~2M. He and his wife hold it in a revocable trust with plans for the asset to be distributed to his adult children. The property is in California, so the children will get the benefits of a locked-in property tax assessment value that is at least half of similar properties ($27k), and when the children do sell, they will get a step-up in cost basis for ~$1.6M on the eventual sale. Assuming a 30% tax on the gain, I am ballparking that benefit to be a $480k tax shield for the children.

However, the owners would prefer to sell now. Primarily because home prices in the area are expected to flatline / deflate/ correct, but also because the property was built in the 50s and more serious deferred repairs and maintenance are starting to compound. It is becoming a lot for the 80-year-old owners who are expecting greater costs in time and dollar (self managed).

Is there any creative deal structure that can be used so that I can buy and occupy the home including the assumed improvements, repairs and maintenance, while allowing the seller to preserve the step-up tax shield for their descendants? The other constraint, the seller is not interested in a 1031 exchange if it means owning/managing another property.

So far, the only concept I can think of is something like a contingent title transfer upon closing. I'm not sure if there is such a deal structure or even the risks involved if engineered, but the idea would be that the title doesn't really transfer / and a final balloon payment isn't made until after the property actually transfers to the children.

Is this a feasible concept, are there other concepts to consider?

All thoughts welcome, and thank you!

--DB

A DST or DST to 721 UPREIT is a potential option. Please shoot me a note if you'd like to discuss.

0 Votes

All Forum Posts by: Joe Vesey

Joe Vesey has started 0 posts and replied 63 times.

Post: Looking to find a replacement property for my 1M 1031

Post: 1031 from 1 relinquished to 3 replacement with additional ownership

Post: 1031 from 1 relinquished to 3 replacement with additional ownership

Post: How to permanently avoid capital gains tax with 1031 Exchange

Post: Investor's Agent in MN

Post: How to make a competitive offer to a seller doing a 1031 Exchange

Post: Multi Family Syndications

Post: how to avoid DST high commisions?

Post: In 1031 exchange can you buy a replacement property with a partner

Post: Legal/Tax Suggestions for Seller wanting to preserve step-up tax shield benefit