All Forum Posts by: Lesley Cabrera

Quote from @Rick Albert:

An appraisal can be very different than what a property would actually sell for. 

Avoiding capital gains is for personal residences, not commercial (double check with a CPA). You would likely need to do a 1031 Exchange.

What do you mean by "control?" Do you own it or not? If the parents still own it, then the tax burden and profits are on them. 

 I own it 100% but with the understanding that I take care of my parents financially.

It is an industrial use building. Part of the building is being used as owner occupied for a business I have and the other 1/2 is being rented. My renter asked me to sell and this is where I am stuck. I would like to get into a few SFR but because I am completely new to this was trying to find the right strategy to move forward.

So I have a commercial property that my parents gave me control of a couple years ago. After much headache and of learning what and how to do things I have decided to sell the property. There is not much owed on the property, I got an appraisal and I also have a motivated buyer. I was not expecting the appraisal value to be as high and now I am a bit intimidated. I am not sure if I need to speak to a tax attorney, a real estate attorney or where to start without getting taken advantage of.  I want to invest in residential property since the commercial side was too big for me and I have already been too naive. I know 500k is all the capital gains I can have to avoid paying so much tax on the sale so investing the rest is my only option. Can someone give me guidance as to what I should be doing next to protect myself.

Quote from @Matt Devincenzo:

Honestly that sounds like many of my client's redevelopment parcels, former car dealerships and auto oriented sites. They almost all were remediated 20-30 years ago, and also almost all have additional previously unknown remediation required today. Most commonly the solution I've seen is to simply remove the contaminated soil, or if the contaminant is minor they can often leave it in place if it is below a parking garage level etc. Also County's have voluntary cleanup programs that streamline the process and inspections as they are interested in getting these resolved. So overall it may not be as big of an issue as you're anticipating.

I just googled the voluntary clean up program for Los Angeles County. I am going to reach out right away. It would have never even crossed my mind to even consider. I will keep you posted as to the county's response. Thank you

So the property is in Los Angeles County. I thought I got a great deal on the property since it was sold to me by family in 2020. They had no clue there was any issue because they never had any Phase 1 report completed. It was not until after I purchased the property that I even knew anything about environmental reports. In 1979 there was a 2,000 gallon gasoline tank installed. It was removed in August 1995 that report shows no pollutants. I don't know if things changed over time with how pollutants are detected in the soil or if the report was not done correctly. I truly do not know. I am getting a few more proposals. Those will take a couple of weeks as well. In the long run I feel I have no choice to continue with the remediation since if I tried selling the property I would end up having to do this anyways. I appreciate all the feedback and suggestions since this is my first time with a commercial property I guess I'm learning the hard way. Oh and I have a body shop with a paint booth as a rental on one of the parcels. Luckily there was no pollutants found there but now I understand why many properties avoid body shops.  

So I invested into a property without knowledge of its past (1st mistake) I have already had a phase 1 and phase II completed. Apparently there are pollutants in the soil. Does anyone have any experience with this?. I have gotten 2 different proposals which range so vastly. The lender is requiring me to have this "all cleared" before moving forward.  Any referrals would be greatly appreciated.