All Forum Posts by: Marty G.

I have owned a property for about 4 years.  It is not my primary residence and have used it as a vacation property.  It's located in FL and the market price for the house is estimated to be $150-175k over what I paid for it 4 years ago.  I'm looking to sell as I don't want to manage (or hire a manager) any longer and be a long distance manager/investor (I'm in CT).  Instead, I'd like to sell this property and take the proceeds and roll that into a rental that's closer to me and use whatever tax advantages I can to assist me.

I'm confused with how the 1031 works and was hoping someone could explain to me how to "use" it.  My current property (that I'm considering selling) is not yet on the market and while there are other houses closer to me that I'd consider buying, I don't know how to have the 1031 work for me so not really sure how to navigate this "exchange".

I've heard so many things (and read so many variations) of how the 1031 applies, I'd like to know how it really works, specifically:

- If I sell my rental house, do I have to identify another house to purchase before I list this one?
- If not, how long do I have to identify the next property to purchase and what happens if that purchase falls through?
- If I purchase the next property, do I base the "taxable" portion on the GAIN of the house (i.e. the 150-175k in profit) or is it based on the total cost of the house?
- Lastly, I've heard that, after the sale, the money must be "untouchable" before purchasing the new property.  Is this just done via a separate bank account or does this have to be done somehow with an escrow service?

Thanks in advance... 1031 has really confused me, so appreciate the help!

Hi Dan,

Curious as to where it says STR are now allowed in Gulfport?   They have been but are restricted to 3x a year for STR.  Did that recently change to something more liberal?

I had read the state was taking over the regulations but the most recent article I could find was last year.

If it’s more liberal, especially now that tourism here has boomed, that would be awesome.

TIA!


Originally posted by @Dan Maciejewski:

Plenty of people do it, but St Pete doesn't allow it. Treasure Island has areas that do, as does Dunedin, and the entire city of Gulfport just allowed it. Clearwater does not allow STR and actively pursues violators. Clearwater Beach has, IIRC, 33 properties that are grandfathered in, and of course worth their weight in gold.

Pinellas County has 24 incorporated municipalities, and then there's all the unincorporated parts that are governed by County rules. Each city will have its own rules and areas that allow STR and each has to be researched if you want to stay above board. I lean toward the State making the rules the same all over, although I agree with the cities that don't want the STate to tell them how to run their business, too.

In no particular order:

Belleair

North Redington Beach

Belleair Beach

Oldsmar

Belleair Bluffs

Pinellas Park

Belleair Shore

Redington Beach

Clearwater

Redington Shores

Dunedin

Safety Harbor

Gulfport

St. Pete Beach

Indian Rocks Beach

St. Petersburg

Indian Shores

Seminole

Kenneth City

South Pasadena

Largo

Tarpon Springs

Madeira Beach

Treasure Island

I fit with #3, for sure.  However, the management company that I hired wasn't handling tenant communication well.  They didn't inspect the property, keep up with even visiting the properties to see the issues.  I'd be contacted by neighbors saying "Your property is looking a bit rough.. what is your management company doing?"  Well, they were doing nothing.  They were collecting their monthly fee and "waiting" for a tenant to mention a light was out, or the door was broken, etc.  Sometimes they never found out until I would find out myself - often MONTHS after something happened.  I fired them.  Unfortunately, there aren't other PM companies in this particular area to move to, so I took it back on.  Within a month, we were back on track -- asked my handyman to make some regular visits to the house and we're back on track with money saved and happy tenants that want to stay vs the turnover I was having before. 

As for folks running the world in group 1.. Agree to disagree.  There's value in delegating for sure, but I wouldn't want someone running the country that can't identify where spending frivolous amounts of money just to not deal with something is the answer. 

Originally posted by @Renee Touchton:

@Marty G.

I would self manage with good tenants, regular inspections, and proactive repairs/replacements,. Those middle of the night calls should be few and far between, and no one will take care of your “customers” like you do. There is also something to be said for building a relationship with your tenants.

I agree.  I like having real relationships with tenants and having them feel like they can (within reason) make requests etc.  I'm not a slum lord by any means and I told the PM that I keep these places as places that I would feel comfortable living in myself.  It pains me to hear that people have had maintenance issues slip through - or worse - reported but never addressed until it required a much larger bill on my end.  

And, you hit the nail on the head - they aren't going to handle it the same way I would, or show it the same care.  One of the MF's that I own has been in the family for 50+ years and I know every door knob, creek, and whistle.  So it frustrates me to hear/see things not being done properly when a simple screwdriver (or changing of a filter, for example) was never done or scheduled.

Thanks for the reply!!

Originally posted by @John Woodington:

@Marty G. I’d say manage it yourself. I use Cozy and really like it. Super easy to use. It will be less stress on you to do it yourself, and the time commitment will be minimal as long as you have good renters.

Hey John -- thanks, man.  I truly appreciate the response.  Anything that Cozy doesn't do that you wish it did?  I agree that it seems super simple.  Been setting it up for when I officially take back the PM side of things and so far seems really nice!  The existing PM uses Appfolio, which I believe is paid, and I've asked for them to set up a profile for me so I can view requests/etc., and they haven't done it.

It'll be nice to have eyes on my own place again.  :)

Thx!
 

Originally posted by @Peter Tverdov:

I always enjoy this discussion topic. I created a property management company because I didn't want anyone else to manage my properties other than the way I do it. The way I do it worked well apparently because it led my business to grow just by word of mouth. Other owners noticed what I was doing and practically threw keys at me to handle their houses.

To be succinct, if you want on the job training and a better respect for what a management company has to do...do it yourself.

Will you do it as good as us? No. Sorry. 

Will you save money? Perhaps, but not as much as you think, especially if you're not factoring in your time spent each month and stress level dealing with various problems. I always enjoy the people who do everything themselves and "save money" with some cheap roofer or "save" money and get railroaded on a price for a new HVAC because they don't know what we know and don't have the relationships with vendors that we have. 

Hi Peter - thanks for the reply.  I had hoped that some of what you mentioned would happen by using a PM - better negotiated rates, more reliable repairs, etc.  What I have found is the total opposite.  They have used my people on occasion, when I was in the loop on repairs/etc., and my folks came in cheaper.  In essence, I became the middleman to them getting in touch with my own repair people, to fix issues that their repair people didn't complete properly the first go around.. I had hoped the relationships they built would be better in the long term for me, but, it seemed to work in the opposite.  Can't say that all PM's are this way as I'm sure there are those that have the same work ethic and commitment as you do, but they have failed to meet even the basic things that I had hoped for when bringing them on board.

When I stopped by one of the properties the other day to do my own check, I was astounded to find the lock box left open with the keys visible, not to mention the front door wide open (visible by the street).  That was Monday and apparently that had happened at some point the Thursday before.  It's just been one "Whoops" after another and you can only pay/deal with "Whoops" before it becomes too much to worry about.  I had thought that having them would eliminate some of the stress - not add to it.

Originally posted by @Nicholas Lohr:

@Marty G.  "Issue Fixer" = person who fixes things. (electrician, plumber, landscaper, etc...)  I guess that meaning got lost in writing?

LOL - no worries.  Thanks Nicholas!!

@Mark Ainley Thanks Mark! Totally agree with you... one of my long standing tenants knows me as the owner already, but I’ll check out the resources you sent over and draft a generic type form with the introduction.

Thanks!!

@Mark Ainley I would definitely appreciate any help on the self management tools. I’ve seen Cozy and like it’s simplicity, and seems to be a forerunner.

The other PM companies in the area that would take my portfolio aren’t willing to budge with their fees, and honestly, I think given my smaller portfolio, I don’t think it warrants their high commissions/fees given the rental history of the properties.

I would love any recommendations for software as I’m making a list of the things I need (posted before this) with the things I think I need to do to prepare the take back.. what to ask for, etc.

Appreciate the help! Feel free to inbox me if you want.

Thx!!

In thinking more about what to do to transfer back to self managing, is there anything I’d be missing from the following list when I contact the PM and let them know I’ll be cancelling their service? Thanks!

From PM company:

1) Existing leases and any related paperwork

2) Keys/lock box codes (I already had my own for them to use - they just changed the codes)

3) Outstanding maintenance requests/work orders

For tenants:

1) Inform tenants of the new management details

2) Maybe establish a 2nd telephone number (Google voice perhaps?) so my primary number isn’t provided

3) Set up new payment platform - Cozy/etc.

Anything I’d be missing?

Thx!!