All Forum Posts by: Jung Won Kim

Hello, where can I find data on how many apartment units/buildings are in a specific city, such as Tulsa, OK for instance? I would also like to see overall city vacancies in the past few years along with building permits issued for 5+ unit residential buildings. I've heard I could find these info on census.gov, but have had trouble finding the relevant info there. Any suggestions would be greatly appreciated. 

Hypothetically, if a GP were to refinance and return let's say 50% of the initial investment to the LPs. Is that money taxed for the LPs? I would think not since it is returning a portion of their initial capital, but not sure how the IRS would view it.

In addition, once the GP refinances the 50% of initial investment of the LPs, I believe the GP would usually charge a refinance fee. If the GP and LPs agree to use that 50% returned money to do a 1031 exchange, is it common for the GP to charge another acquisition fee on top of the refinance fee?

In regards to my first question about whether the refinanced money is taxed for the LPs, that's assuming there is NO 1031 exchange.

@Rick Martin

Thanks Rick. I guess the SEC attorney would also help determine whether my friends count as sophisticated investors.

Thank you!

@Connor Swanson

@Connor Swanson

Thank you and thanks to everyone else who replied as well. I hadn't thought of a JV or simple partnership so will look into that (although I assume these wouldn't have the "limited liability" aspect to them).

In regards to the net worth requirement, do you know if the capital we put into the down payment will count, or would our net worths have to equal or be greater than the loan amount net of the down payment?

@Greg Dickerson

Thanks Greg. Do you know of any legal definitions for what entails a sophisticated investor? Searching on google yields many different definitions, but it looks like it's a very subjective designation.

Hello,

Please let me know if this hypothetical idea is legally possible. My friends and I are non-accredited but together we have enough capital to syndicate and finance the down payment and associated costs of an apartment.

I have interest in essentially acting as a general partner (putting together the deal, managing after close, exit/refinance strategies, etc.), and my friends wish to take on a passive role as limited partners.

Since none of us are accredited, is it possible to structure an LLC or LP with all of us general partners and tweaking the conventional contract to make the fees traditionally associated for general partners be directed to me?

Thank you in advance for any input/advice.

Hi,

I had a quick question - hypothetically, if I had capital gains on stocks, could I theoretically purchase a property that same year and do bonus depreciation from the property to offset my stock capital gains taxes?

For instance, let's say I have $50K capital gains tax. If i purchase a property worth around $250,000, and recognize 20% depreciation ($250K X 20% = $50K) through cost segregation, bonus dep, etc, would I effectively pay zero capital gains on my stocks? Or are real estate depreciation only used to offset real estate income?

@Yonah Weiss Hey Yonah thanks for your comment - you pretty much answered my question. But to follow up on your land comment, if the land portion was around ~30% of the hypothetical purchase price of $10MM, does that mean the cost segregation would only account for ~20% of 70% of the purchase price (excluding the land portion)? So in other words, given the factors stated above are true, would my bonus depreciation that I can recognize in year 1 be $7MM X 20% = $1.4MM instead of $2MM?

On another note using the same example as above - 

For cost segregation, I heard that generally the upfront depreciation it can generate (after having engineers appraise the building) is roughly 20%-30% of the purchase price.

How would that work? If I purchase for $10MM, being conservative and going with the 20%, does that mean I would have a first year depreciation expense of $2MM? If instead I buy the same property for $8MM, then would that bonus depreciation then be $1.6MM?

I don't understand how depreciable aspects of an apartment are tied to the purchase price. If someone can explain this I would greatly appreciate it. 

Great stuff, thanks guys