All Forum Posts by: Kay March

Is it possible to get homeowners' insurance on a house with cloth wiring? If so, is it extremely expensive?

In Florida a buyer and seller have agreed to a relatively short inspection contingency period, five days. During the five days a problem with the roof arises which cannot be resolved within the five day period due to the lack of cooperation of the roofing company who installed the problem roof and due to the difficulty of getting roofing estimates from alternative roofers. Can the length of the inspection contingency be renegotiated?

While considering doing a 1031 exchange into a Delaware Statutory Trust (DST), I read that upfront costs for a DST can range from 10% to 18% of the invested equity. Assuming that no debt is involved, Is paying that cost necessarily better than paying the tax on your long term capital gain in the property? The 10% to 18% cost of the DST would be applied to the entire amount of the investment, whereas the capital gains tax would be applied only to the gain. The 10% to 18% cost of the DST would be repeated every time the DST terminates and a new 1031 exchange must be made into a new DST, maybe every 5 to 8 years, whereas the capital gains tax could be a one time cost. Say you want to do a 1031 exchange of the $300,000 proceeds (no debt) of the sale of a property, and let's say that the $300,000 includes a long term gain of $100,000. How is it better to pay 10% to 18% of $300,000, probably every 5 to 8 years, instead of a 15% or 20% capital gains tax on $100,000 just once?

@Bruce Woodruff Thank you, your suggestion sounds workable, and the addendum would be key. Just in case you're curious, though, I'll explain that I will not cooperate with these tenants anymore every time they think up some new request. I will keep your suggestion in mind for future use, though, so thanks again!

@Dave Foster Thank you for mentioning the 721 exchange, or "UPREIT," as it seems to be called. A quick Internet search makes it look promising, if complicated, and it might interest @Anita Ahuja, since she says that she already contacted a Houston REIT group that does REITs (even though that particular group didn't do 1031 exchanges). I will be looking into it myself, so thanks again!

@Nathan GesnerThank you, but if the service provider causes damage, I want to be able to choose the company that will fix the damage, and if the tenants are bound to pay that bill, they might disagree with my choice. I don't want that potential conflict/hassle/headache.

@Jonathan R McLaughlin @Nathan Gesner @Nicholas Darracq  OK, the reason I don't want the tenants to pay for the duct cleaning, or any other work on the house, is that if the tenants pay for the work, then I do not have a contractual relationship with the service provider, and that means that if the service provider does damage, which is possible with duct cleaning, then I have no recourse against them. I will have to charge the tenants for repairing the damage, and the tenants will be at a disadvantage because they will have no say in who does the repairs or how much they will cost, and for that reason and for other possible reasons the tenants might refuse to pay, and so on. The situation is similarly complicated if I pay for the duct cleaning and the tenants agree to reimburse me.

I have come to believe, anyway, that duct cleaning is at best of no value and at worst a scam, except in certain unusual
and specific circumstances, none of which exists here, and it can be damaging to the house. Here's an article on the subject: https://www.washingtonpost.com/lifestyle/home/considering-having-your-air-ducts-cleaned-think-again/2019/01/28/cb5c14b4-1393-11e9-b6ad-9cfd62dbb0a8_story.html

If the REIT idea is no good, have you looked at doing a 1031 exchange into a Delaware Statutory Trust? Those are designed for 1031 exchanges.

Looks like the property is in or close to a little crime pocket on the Trulia listing.

Property taxes are high there, though, aren't they?