All Forum Posts by: Matthew Ryan

@Nate B. - If you go the route of 1031 and have have difficulties completing the 1031 exchange on the capital gain portion, consider opportunity zone investments. You have 180 days to invest into a "fund" which can be another RE investors deal or your own. You would defer the capital gain until 2026 and then pay 85% of the original tax liability in that year should you invest this tax year. If you buy a property on your own you must substantially improve. I can get into more detail about how this works provided you are interested. If you hold the investment for ten years, you pay no tax when you sell (1031 you have to keep "rolling"). Similar process but with some advantages, some disadvantages. Either way, you have two options at play and it sounds like some good equity so congrats! 

@Dave Foster - there is certinly a lot of distressed blockchain out there ;0 

@Ray Hayward - you can sell stock and invest in an Opportunity Zone investment.

@Lindsey Iskierka - You can also take the gain (only) and invest in an Opportunity Zone Fund or singular Opportunity Zone investment. You have 180 days to do so then 30 months from the time you invest in the fund to meet the IRS guidelines. Similar to a 1031 but with different benefits.

@Jason Scott - Hope this doesn't sound gimmicky when I say this but there has never been a better time to take money off the table in the equities market and shelter it in a solid RE deal. I've included a copy of a prior response on how this works for those looking to harvest capital gains.

$100k Gain in 2019 tax year defers full federal tax on the gain until 2026. In 2026, you reduce your tax burden on the $100k by 15%. So only 85% of the $100k is now taxable ($85k). If you invest after this tax year and up to 2021, you pay tax on $90k. Any cash on cash returned during the investment period is still subject to tax. If you keep the investment for ten years, so you go to sell in 2029, and say that investment is now worth $250k ($150k profit plus $100k initial investment), you pay zero tax on the $150k gain. You wouldn't pay any additional tax on the $100k initial investment because you already paid that in 2026. 

Hope this makes sense. Now, you must meet the substantial improvement clause and all IRS guidelines for an Opportunity fund. None of which should be done with out consulting an attorney. Also, this is not tax or investment advice, not meant to be construed as tax or investment advice and you are responsible for doing your own research regarding yours or anyone elses investments. Let me know if I can help further. 

Design Draw Build in Oakland is helping Oakland write and amend ADU laws. Great resources who can help. I can give a personal intro if needed.

@Dustan Marshall - You might also consider, depending on whether you qualify as an accredited investor, looking into investing via a sponsor or syndicator. There's a stigma associated with it for those new to the investment community who think they "can do it all themselves" and keep all the profit.  This can happen. But RE is a complex business and  subject to macro events larger than many of us can plan for. I would suggest looking into this as a way to not only diversify but to also learn from those who have been in the business for multiple cycles. I spoke with an older, post retirement investor at a summit a few weekends back and you know what they were doing? Selling all their rentals and investing with fellow syndicators. "Too much trouble when I can just hire you guys to handle it for me". Something to think about. Joe Fairless has been very successful and is Ohio based. Also an educator on the subject. Best of luck. 

@Andre Pennix - The gains invested in an Opportunity Zone get taxed like this:

$100k Gain in 2019 tax year defers full federal tax on the gain until 2026. In 2026, you reducce your tax burden on the $100k by 15%. So only 85% of the $100k is now taxable ($85k). If you invest after this tax year and up to 2021, you pay tax on $90k. Any cash on cash returned during the investment period is still subject to tax. If you keep the investment for ten years, so you go to sell in 2029, and say that investment is now worth $250k ($150k profit plus $100k initial investment), you pay zero tax on the $150k gain. You wouldn't pay any additional tax on the $100k initial investment because you already paid that in 2026. 

Make sense? Now, you must meet the substantial improvement clause and all IRS guidelines for an Opportunity fund. None of which should be done with out consulting an attorney. Also, this is not tax or investment advice, not meant to be construed as tax or investment advice and you are responsible for doing your own research regarding yours or anyone elses investments. Best of luck. 

@William Chu - Take off a zero and you have the size of our fund. It can be challenging, yes, to work in the mid-market space ($1-$20million), especially on the lower end of that spectrum, but don't believe it can't be done. Syndicators like myself are always open to other operators or lone wolfs who may have a good deal but don't know how to get it funded. Sometimes that small deals have the best margins because that's where no one is looking. 

@Alice Chau - you can DM for a rundown on agents once I have a better idea on your criteria. We've been in Sac market for about two years now.