All Forum Posts by: Laura DenHaan

I live in the Bay Area and am exploring investing in Northern Nevada due to its proximity. Do we have any members who have rental properties in Fernley NV? The median home price is in my price range there. I'm interested in others' experience in the market and where you think it is going. It seems there are a lot of jobs generated by the industrial parks, but the rent to price ratio seems a little low. The schools aren't rated as high as Sparks. I considered Sparks but its out of my price range. Otherwise, it seems there is a lot of small town pride in Fernley and it is growing. I'm just not sure the rents are in line with the home prices.

Im selling a rental property and would like to do a 1031 exchange. Ive identified a replacement property but am not under contract for the property Im relinquishing yet. If I do reverse 1031 exchange, can I take out a heloc against my primary residence to use for the equity I am reinvesting in the replacement property and still qualify for a 1031 exchange? My lender says I qualify for the heloc.

For appreciation I would try to get a house even if it means no cash flow with a loan initially. I bought a townhouse as my first investment 18 years ago. What I learned is that it is harder to differentiate your unit when vacancy is higher, and you have additional cost of HOA dues which you cannot control increases on, and appreciation is less with all else, like location, being equal. On the flip side, you have less expenses in maintenance but I dont think they offset each other.

As far as property management, it depends on how much time you have and what your time is worth. Even with a property manger, you need to monitor them to make sure they are doing their job. I made the mistake of not doing this and it cost me a lot of money. Its important to find a good one which is not easy. 

In researching investing in upstate South Carolina, I came across a state bill 3264 for statewide rent control introduced early this year. It is currently on the house floor (not passed, not law). To clarify, there is no rent control at this time, its just proposed. However, when I google for more information on where this might be headed and general thoughts on it, I found nothing. The proposal is to restrict rent increases to 7% plus the change in the CPI. 

Is anyone aware of this and know anything about it?

Laura

Quote from @Mark H. Porter:

What I've always done is have the three offers lined up and in due diligence at the time of downleg closing. My strategy has been recently to have a DST as my third choice as a backup in case both the other two fail due diligence.

Thank you Mark. Any tips for lining the offers up by the time of closing? It is still a time crunch. A backup DST would greatly alleviate the my anxiety. How do you recommend going about finding a DST that is a good fit and how do you go about due diligence? I know this is going to illicit responses from folks who sell them. I'd really like to hear from unbiased buyer and appreciate your insight.

I made the decision to sell my rental property in OR that I've had for 18 years - the time was right for reasons I won't get into. Now I'm trying to figure out where to invest the proceeds - I estimate it will be about $400k - and defer taxes. My priority is income more than capital gains. I don't have high income that I need to shelter (semi-retired). I live in California and would invest out of state. I am overwhelmed trying to figure out where and how to reinvest, and the clock on a 1031 exchange will tick once I get an offer and close. We put in the listing that I want to close after 1/1 so I estimate I have until mid-Feb to identify a replacement property. I plan on being invested in real estate for another 20 years. I have one other property in Bellingham WA near the university with a great property manager but the prices there are too high to get a decent cash on cash return right now.

Here is what I've considered so far and I'm open to other ideas. One of the mistakes I made in OR is not taking enough time to search for the right property (and not switching property manager years ago). Any thoughts on how to make a decision and move forward within my time frame? 

1) Buying another property - I would have to figure out what markets to potentially look for a replacement property. I'm okay with managing a property manager. I'm concerned I won't be able to identify a replacement property in time as so far I haven't even identified which markets to look in. I do like neighborhoods near colleges where one year leases are the norm. Any suggestions for me to research?

2) 721 exchange into an UPREIT. I like the diversity of eventually being in a REIT, but I can't go back and do anymore 1031 exchanges if I am unhappy with the UPREIT I choose. It also is very hard for me to really understand the cash flow and fees of an UPREIT to evaluate if the investment is right for me.

3) DST - I'm not crazy about investing in a DST because I'd have to do another 1031 exchange when the property sells and pay another load to buy into another DST and if the DST has only 1 property it wouldn't provide the diversification benefit of an UPREIT. I would consider a DST as a backup option in case I can't identify a replacement property in time, though I have the same problem as an UPREIT which is really understanding the cash flow and fees.

TIA,

Laura