All Forum Posts by: Mark G.

Need some advice from fellow Missouri investors.

We own a mobile home park in central Missouri. The park is situated with submetered water which we bill back to each resident along with a sewer charge. We source our water directly from the county and flow our sewer to the municipality, we have no well/lift station/treatment plant or any chemicals. Just pipes in and pipes out.

There is a surprising amount of regulation between the Missouri DNR and PSC which comes with submetering and billing so wondering how others have their utility billback situated. This likely is not unique to mobile home parks but also any multi-family investment.

1. For investors who bill back, what billing methodology do you use and what corresponding regulation do you have to follow (certified DS1 water system operator on staff, monthly sampling programs, annual CCRs, rate tarriffs, etc.)?

2. Does anyone use RUBS, and if so, is there any regulatory requirement with PSC or DNR?

3. Does anyone have experience going through a decertification process with the PSC or delisting with the DNR? Any advice or useful contacts would be helpful.

We are evaluating whether to transition to just lumping water into rent to reduce the administrative burden, but prefer to keep the meters running to hold residents responsible for conservation and their own individual usage.

Thanks in advance!

Katie, very helpful, really appreciate your insight! I believe the property is titled to a living trust.

I don't think the outright gift is an option but definitely worth exploring (sibling fairness dynamics). They would prefer to replace the income the house is generating with another source. Eating into the gift exclusion on part of the purchase would be okay. 20+ years of life expectancy remaining.

On the 1031 front, say the property FMV is $1 million and the property is purchased for $700k cash with a $300k gift. Would the parents then have to top up the cash in a 1031 to buy an exchange property for at least $1 million or would they only need to use the $700k proceeds received.

Definitely please PM me with a couple referrals. Hard to get too specific around the circumstances in a public forum.

Does anyone have experience with parent to child real estate transfers in CA? I understand there is a mechanism that allows a child to buy a home from their parents and retain the original real estate tax basis under California Prop 58. 

The house was originally a primary residence but was converted to a rental property when they moved a number of years ago. Current tax basis is approximately 25%-35% of FMV and the sale would trigger a sizable capital gain. Child would like to buy the house, potentially for below market value, retain the original real estate tax basis and then parents would like to use the proceeds from sale to complete a 1031 in order to defer capital gains.

I can see a few potential issues:

1. Does the fact that parents converted it to a rental from primary residence cause a problem
2. Is a purchase below FMV possible or are there 1031 ramifications
3. If below FMV a bad idea, could some sort of non-interest bearing note be structured between the parties to make up gap between proceeds and FMV
4. Can 1031 exchange property they identify be contributed into an LLC after closing for asset protection

Any advice on the structure outlined above, or other ways to transfer real estate from parent to child (while parents still living) would be greatly appreciated. Would also welcome a referral to an attorney/CPA to assist with executing this transaction if it is possible.