All Forum Posts by: Jon Parker

Thanks @Danielle Lynch

Michael, let us know if we can assist you. We have a wide range of experience investing in MF. Main focus is value add and distressed revitalization. 

@Dave Foster Yes I would argue the majority of 1031 exchangers think it's their only option. I would rather have a "reckoning day" on my paper losses and not have a loaded gun to my head by the IRS to find a suitable replacement under their strict timeline. If you're a passive investor and don't care to have free capital to work with, leverage and multiply, I would argue the 1031 exchange product is just fine. For hands on investors looking to maximize gains and growth, the 1031 is inferior to the cash out refi model. I'd much rather have access to tax free money to reinvest, meanwhile earning a return from cash flow and appreciation since we didn't need to sell. This is a very scalable and repeatable action. Over 10 years, the initial down payment on investment #1 can equate to 4-5 buildings, meanwhile you're likely not owing taxes on any of it.   

@Scott Wolf I just reread my response above. Remind me not to use voice to text again! Ha 

Yes, if you elect to utilize bonus depreciation, when you sell that depreciation is recaptured and taxed as regular income. However, there’s a cap on the tax rate of 25%. Which for high earners or large sale gains is a big win. 

@Scott Wolf

Het Scott, yes and no. Ideally what I’d recommend and what we do for the majority of our holdings is - When we first close on the building we do a cost seg survey “as is”. Over the next three years, we do need renovations and cat packs as well as raise cash flow of course. We will then do another cost seg survey since we’re able to depreciate all the new fixtures and improvements. This is in addition to the deductions you’d get anyways for spending money each year towards improvements. Double dipping legally! We then go to the bank and cash out refi at our new higher value. We will then re-deploy this nontaxable capital into a new purchase. Around year 5 we will then sell the asset and 90% of the time unless you force a deal you can’t find a suitable exchange property to meet the 1031 requirements so rather than having a gun to your head we take our time and use the next purchase bonus depreciation to offset capital gains. Rinse and repeat. 

Jonathan,

We are a full service real estate investments and development firm. Let us know how we can help! Thanks

Maryam,

We are a full service real estate investments and development firm. Let us know how we can help! Thanks

Maryam,

We are a full service real estate investments and development firm. Let us know how we can help! Thanks 

1031 is outdated and only the best option if you're building out a long term hold portfolio or at least trading up in deal size each time. You can avoid capital gains simply by offsetting taxes due with paper losses. If you buy or LP in a larger multi family deal, you'll be able to do a cost seg study and receive bonus depreciation. Happy to discuss more, we help investors like yourself. We're a full serviced investments and development firm based in Tampa, FL. We just had a retired swat officer cash out their pension and would've owed $250k in taxes, he invested the money in a Miami 10 unit and a Clearwater 15 unit through us and he got enough paper losses to cover what he owed + left over deductions for his earned income. 

Danielle,

To contrary belief, starting small is actually riskier in the RE investment space. For example if you have a duplex and 1 tenant moves out or stops paying rent you're going from 100% occupied to 50% in the snap of the fingers. 1 AC goes out or the roof needs to be replaced? Kiss your net cash flow gone for minimum 1 year on those smaller deals. If you have $900k to invest, I would focus on at least 10 units, ideally closer to 20 units. Being it's your first deal, it's going to be harder getting debt options and you don't want to be over leveraged anyways so $900k should equate to a max $2m deal. For this budget I would target affordable housing pockets in Miami like Little Havana or North Miami inland suburbs. Miami has become one of the most expensive cities to live in, yet we need housing options for the workers that keep the city moving. You'll never be vacant and you'll be able to raise rents yearly since you'll be bridging the gap of affordability. I'm happy to discuss more as we provide consulting. We are a full service investments and development company. Happy to assist. Thanks

Alejandra,

Depending on your travel schedule and that you're new in the space, I would highly recommend connecting with a company like ours or someone experienced in the flipping game before starting. We do offer consulting programs ranging from hourly to handling the project A to Z. A lot of our clients are international or out of state. They rely on us to be their boots on the ground and protect their investment! Happy to hop on a call or chat anytime.