All Forum Posts by: Leah M.

@Ash Patel   Would you be willing to share the name of the Company that you use? This was the main point that bothered me about the syndication that I invested with. 

The syndications I've seen use LLC structures. How can you 1031, unless the entire group wants to?

How can you 1031? The syndications Ive seen use LLC structures?

I am not opposed to a syndication.  Obviously, the time savings is a big factor.  I'm just saying that the tax implications of investing with a syndication vs. buying onesself are huge, and one should be aware of that major compromise.  I found that between the fees of the syndication and the tax implications, I was better off just moving the money without it being the "best" deal.  At the end of the day, it of course depends on the quality of the syndication. 

I don't find syndications to be that great an option, although I've invested with them.  While they may have some superiority in investing skills to me, the fees that they collect wipe that out, and I do better on what I buy myself.  The main problem with a syndication is that it is usually a buy and hold for a fixed time, say 7-10 years, followed by a sale, and a big capital gains tax bill at the end, since you can't really do a 1031. Much better to buy and hold on your own so that you can defer taxes.

Hi Joel, I see that you have a lot of knowledge in the triple net lease space and I had the following question. When I was studying the space I saw that prices of net lease product was often 3-4X the value of the mom and pop retail located right nearby.  This was because the rent for the net lease was way higher while the cap rate way lower.  My question to you is what ways are there to mitigate the risks associated with the tenant not renewing at the end of their lease, and you as the buyer essentially falling off a cliff.

I am closing on two properties this week in Boston.  While I own real estate in other areas this is my first real estate purchase in Boston.  i am so far finding that my expenses are coming in lower than what I underwrote.  I do think at least for my properties that expenses will only land up being 25-35% of my revenue. But each property is different. 

  In terms of the 1% rule, why are following it? Is it that you think that an investment at below that percentage is not a good investment? I personally don't really agree with that.  I think that over say the next 20 years Boston will appreciate significantly.  Boston is now fully built out (i.e. no empty land between cities the way there used to be) and is the center of what is going to one day be a mega industry (biotechnology, bioinformatics etc.) These are fields that today are only "on the runway" and Boston real estate will be a major beneficiary when they "take off".  I like Boston therefore as a market, and simply try to find deals that I think are the better ones within Boston. 

A 50/50 split of profits seems kind of aggressive.  

Yes certainly in Newton most of the value is land value.  But a 50K house could in theory appreciate in value even though it is all the value of the structure and the land has no value.  This could happen like you said due to inflation, a big increase in incomes in the area etc.  Obviously wear and tear is a constant headwind for appreciation of the structure that land appreciation does not face.  Also, land can appreciate indefinitely, whereas the structure itself is limited in appreciation by the cost of construction. 

I think a house can appreciate despite depreciation due to a lack of supply and increased demand.  For example, if no new cars were being produced, a car that I bought three years ago could be worth more a year later, even though it is a year older.  This could happen since there is no new supply but demand has increased to a point offsetting and overtaking the "depreciation" of the parts.