All Forum Posts by: Michael Willis

1) Local Office Building  (option 1)

Hi All, so for the past few months I have been sharing my finds for a 1031 exchange in the NYC metro area. I have found a solid deal on a 16.5k sq. ft occupied office building for 2.4m at about 8% cap with room to improve. However, financing is becoming a challenge and expensive and appears to be eating away at the net proceeds to me. My personal target was with 600k down with 100k/yr to me net post financing costs. That number appears to be closer to +/-75k/yr. 

So I have kept looking.

2) Mobile Home Park (option 2)

After reading up on mobile home parks, I stumbled across one thats 55+ only and 1 hr 15 mins from where I live and appears to be well maintained and is 98% occupied. The park has 56 units (up to 60 approved) 28 homes owned by the park. While lots goes into the analysis for a Mobile Home Park (for which I am less versed - due diligence will flush those issues out) this much I do know.  The park at ask is 11.5% cap with 16% cash on cash return - no bank required, no points or fees but there is a requirement of 900k down. With 900k down the net return after owner financing over 15 years would be +/-150k/yr. Investing 50k more into the remaining vacant pads would lift the net to me post financing to about +/-200k/yr. 

I am leaning towards the mobile home park at this point for ease of purchase, relative proximity, only 1 hr 15 mins away, and return. Those are the facts. Thoughts??

Thanks in advance!  

Hi all, what’s the better option between a DST Vs a TIC all things being equal? Is using these fractional share investments a good “safety valve” if the purchase of a real property 1031 falls through?

Hi Dave per the rep at Senior Living Fund they do have a 1031 compliant DST now. Starting at 7% matures in 2021 (not sure what happens then) with .15 basis point increases annually paid out monthly. No points or fees and profit sharing. Claimed Annualized returns 11-13% at the end. What happens when a DST “matures” What would be the process I the investor would go through to move onto the next investment? Easy to exit a DST for a real property? DST Vs TIC?

I am curious if any of these investments are 1031 eligible...

HI all, so quick update. After all that the seller backed out even with a full price offer.  Onto the next. So goes the game in real estate sometimes.

Fair enough Bill. That’s what I get when a sellers agent says to me to explain to the seller the benefits of seller financing and gives me nothing else. Input appreciated.

Would there be any reason for seller and I to propose I remit 20% to him directly as a down and he hold the 1st mortgage for 3 years say interest only. Defer taxes and buy me more time to pull cash out elsewhere or strategize. Whatever the agreement wouldn’t it come down to the sellers cash needs?

That’s what I was thinking also

I understand the feedback. I should be clearer. I have several other properties which cash flow with equity. So with that being said, and having run the numbers on the subject property cash flowing with 30% down I’m trying to find the way to bridge through the sale without selling another holding but perhaps to refi the reserves out or do a 2nd mortgage on another property.

If I only have 20% and banks are requiring 30% for a down payment, and I have no reserves after the down payment but the seller is willing to hold a note, whats the best structure for that deal to be made? 

1) I remit 20% and the seller holds the note for the balance? Interest only?

2) I remit 20% to the bank and the seller holds a 10% second mortgage interest only?

or is there a better way?

Thanks to all!