All Forum Posts by: Lyndsay Dentel

@Lyndsay Dentel, Yes this is an awesome way to allocate your 1031. In order to defer all tax you must purchase at least as much as your net sale (600K ish) and use all of your net proceeds in the purchase or purchases (300K ish). You do not have to carry the same debt at all. You can bring in cash from your own reserves. But most people do not have that so they end up replacing the debt. Purchasing at least as much as you sell and using all of the cash are the requirements. Debt simply fills in what you need to meet those benchmarks.

You can purchase more than one property. And you can allocate your proceeds in any way you want. So what your talking about is something I've led several clients through at this time in the market. I call it a form of defensive investing. First of all you've got one cash property that is now safe from debt risk. If the market goes south your worst case is adjust rent to pay the taxes and insurance. That property is down turn safe. But the other property is able to enjoy the benefits of arbitrage on the interest and leverage. So your blended NOI is higher.

And, as you identified, if you want to you can do a refi and simply hang on to the cash free of the 1031 timelines and wait for a bargain to show up on your doorstep!

Your original capital is not taxable. But if you take money out of the 1031 or if you purchase less than what you sell the IRS simply says that you are taking profit first. So what you would call a return of your original capital they call taking profit. And they generally win the argument :).

But as long as you purchase at least as much as your sale and use all the cash you won't have to worry about it. Use the refi to pay you back your original capital if you want.

Great Plan!!

1 Vote

Thank you! I will check them out!

Originally posted by @Julee Felsman:

@Lyndsay Dentel hi there! You can absolutely do all of this. :)

Hands down the best 1031 facilitator in Portland (or anywhere) is Toija Beutler with Beutler exchange. I have had hundreds of clients us her and have used her team myself twice.
https://www.beutlerexchangegroup.com

Ask her and/or your CPA how soon after closing you can refi.

And note that on the refi your maximum cash back will be limited to 75 ltv (assuming single family) up to the the amount you spent to acquire the property (price and closing costs) during the first 6 months.

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Hello, I am trying to make sure I have this correct. We are planning on talking with an intermediary next week but I'd love to pick your brain. Newbie to the 1031 world.

Current property purchased: 400k, 300k mortgage.

Estimated sale: 600k net proceeds 200k plus initial investment of 100k. Total proceeds 300k

Idea: Purchase another propety for 400k with 100k down, to have another mortgage for 300k. Purchase 2nd property with 200k cash. Wait, then refinance the 2nd property with mortgage after other closes.

Questions:

1. Is my initial investment of 100k taxable as well? My research says yes.

2. Can I split it up with one mortgage and one cash? I'm concerned about two mortgage loans at one time, and would prefer to do one and cash the rest. The requirement is to have the same loan right? So I'd only technically need 300k loan.

3. If I can do the split and purchase one with cash, when can I refinance and pull money out to buy another?

Any help would be appreciated. If you have an intermediary in Portland, OR you prefer, please send them my way.

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If you were considering selling your Property Management Contracts, I know the normal is too sell it for your annual revenue (ex. $100/mo contracts, sell for $1200). Would you also list the expected revenue from the annual renewal? For Example, you have a contract at $100/mo, with a renewal of $250 each year, would you list at $1200 + $250, selling at $1450? Or only list for the $1200?

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Hey everyone! I own rentals and own a new property management company. My question today is regarding preventative maintenance of the rentals I manage. Currently I manage repairs as they come up, and suggest repairs when I see them.

So, moving forward, do you expect your property manager to be in charge of scheduling preventative maintenance? For example, if you have a gas furnace and it needs a tune up every year, and new filters every 6 months, do you expect the property manager to schedule those things without being requested? Or do you have your own personal tracking system of the property you own and ask the PM to schedule things as needed?

I haven't found a great way to track all these things yet, currently I just have a list of seasonal maintenance that is recommended, and then when I do my 6 month walk throughs, write down anything that I think could use maintenance (re-caulk exterior, pressure wash stuff, etc.). I am still small, so I just check with the owners about the suggestions, and we schedule the maintenance per their desires.

I feel like the answer I will get is I want the PM to manage it all but to check with owners before spending more than xx amount. So the follow up question would be, how do you all track all these calendar items? My calendar is getting really full of reminders. I use Tenant Cloud for PM and there is not a lot of good add ons in there, but I found that I was not happy with the paid services for smaller landlords, and I am not large enough for the nice ones.

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Mateusz,

We have considered similar options for ourselves, but in the end it didnt make sense for us. We ran the numbers with our side using the identical expenses we have currently. If with the rental we had a significant surplus, we went and looked at it. Milwaukie has some more fun renting laws, so be aware of that. I love OC, that's where we are trying to move to (I'm currently in Milwaukie).

My advice for you is document your expenses and make sure you run the numbers showing what you'd be willing to pay on your side. Then you can evaluate better your properties. Also look to see what the rent would have to be to make it cash flow, so if in 2 years you want to buy a SFH to live in, would your rental still be profitable, even in a small amount.

Have a good day and happy hunting!!

Lyndsay Dentel

1 Vote

All Forum Posts by: Lyndsay Dentel

Lyndsay Dentel has started 3 posts and replied 6 times.

Post: 1031 into two properties, one new mortgage

Post: 1031 into two properties, one new mortgage

Post: 1031 into two properties, one new mortgage

Post: Property Management Contracts Price

Post: Property Manager and Seasonal Maintenance

Post: Beginner just starting out in Portland, OR area.