All Forum Posts by: Mike Savage

@Peter W.

Thx for your honest response. Yes we have a son but he is in college. Too young to take over for probably another 5 years. This is my point. Im in a bit of pickle. Maybe i bite the bullet and try PM and then if i really dont like them incan either take back management or sell if its just too much. Feels a bit of a Middle age trap.

Unexpected

 o.k.  some great points and questions i will respond to.  yes I guess our son could inherit and then sell right away but we'd be gone and if that is best suited for his lifestyle so be it. I personally would like to create multi generational wealth ie his children's children and I will have that conversation but not until he launches and gets his own life going.   i guess my preferred inheritance option would be to have cash flowing property checks in the mailbox every month that could supplement any other income and that budget could fund everything from passion projects to tuition to memory making travel experiences. 

I do have a small IT business but it gotten whalloped the last 10 years with Covid kinda taking it down hard.  I am self made with street corner knowledge.  where I failed in my business is not having a 1, 5, 10 yr plan and failing to see the assorted train wrecks coming down the track.  however i'm not sad and had a great run and probably could rinse and repeat if i could free up time and mindspace which is not unlikely in about 2 years.  in the meantime we would like to live overseas again and maybe start developing a new business plan from there.  I can't remember where I once read something like work on your business not in your business.  i think it's time I meditate on what it is we are really looking for at this time in our lives.  (empty nest)  i'm very good at creating spaces.  an architect neighbor suggested I become a GC but not sure i want those client headaches.  I think part of a design/build company could be cool.  i dunno.  just trying to avoid the race to the bottom.  

interesting and timely article. I will reach out to see if any local Portland investors have experience in DST's

 very interesting.  i know nothing about notes and wonder how long the increased yields would take to offset capital gains taxes.  let's pretend it's an estimated $150k in transaction costs (state, federal, repairs, agents fees ..from our accountant) to sell our 1st prop worth between $550-$600k  our accountant told us that would likely take a very long time to recoup and honestly I don't know where i would put the proceeds to maximize returns.  Bottom line is we have moved from an appreciation model that we did very well over past 20 years to a cash flow model.  our appreciation was great when we had w2 income but now we are looking for cash flow income and not as concerned w appreciation.  in fact the market is a bit down in 2024 but i know better to worry about that for long.  quality properties here are still selling quickly and for over asking if you market and stage them properly.  we are in great school district w low crime and highly desirable mid century aesthetic.  i also if rates drop a bit i think buyers will be coming back around.  and worse case is if we don't get a number we like we would continue to rent the properties.  phew.

 very interesting.  will read up and educate myself.  thank you.

our advisor would like us to sell any one of our three rentals but especially the lowest performing cash flow property.  currently low single digit.  then take those proceeds and pay off loan debt especially our adjustable HELOCS that have been skyrocketing.  He thinks that if we sold a property even if we had to pay top capital gains state and federal that it would be worth it as it would double our income due to improved cash flow rather than the majority of our loan payment going towards interest.  he has been advising most of his Portland clients to sell due to huge property tax increases and headwinds for property owners due to the increase in tenants rights ie. having to pay a tenant to vacate even if you are moving back into property.  I am really not exited about paying capital gains at all.  wondering if there is a time where we just give in or is that the wrong mindset.  

thx for the heads up. I will talk to both our accountant and advisor next week. Both are qualified but not heavily investing in income properties. FTR. we bought our starter home and kept it then traded up. We've now done that 3 times and also bought a small live/work condo as well. I had planned to be a buy hold forever investor but reevaluating our plan. We would like to go and live over seas again and not crzy about hiring PM. so DST might be interesting option for next 2-5 years we may be away.

sorry what are DST's?

 so what suggestions might you have for more passive investments?  we are looking to spend more time overseas so 1031 into some kind of managed property ?

hi Dave, yes our accountant has indeed mentioned a possible 1031 into a vacation type property and said we could even use it for up to 2 weeks a year and then write off the travel costs to get there as part of yearly maintenance in IRS code.  i guess the question is can we still get or exceed the approx $10k /year cash flow after expenses that our Portland rental is bringing in plus continue nice appreciation.  some concerns are  high insurance costs if it was a beach property and resale/vacancy concern if in a remote area.  But honestly we want to spend more time traveling out of the country the next 2 years.  As far as we know we cannot 1031 into another country?

one other idea i've been thinking about is selling the Portland rental and 1031 into a property near my mom on the east coast who is looking for a single level home.  She would then rent it from us as she could easily rent out her existing house which would more than cover the rent.