All Forum Posts by: Michael Torhan

Most CPA firms in the area have knowledgeable professionals working on real estate matters. Likewise, there are a lot of forum members here that are able to work remotely. 

Being from the NYC area, I know a lot of firms host various real estate events which might be worthwhile to look into. You have the opportunity to learn about the industry while also meeting some of the real estate team members. Just a thought on one possible way for you to connect with a team that is a good fit.

This is an interesting question. Here is an article where a law professor discusses a lot of the uncertainties surrounding 1031 exchanges after the tax law changes. The author here suggests that a cost seg. study merely identifies what is 1250 property, 1245 property, etc. and presumably these categories exist even without the cost seg. study.

Many questions exist currently.. I think everyone is looking forward to new regulations!

Link to the article:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3179003

I like to read the DepositAccounts blog (https://www.depositaccounts.com/blog/)  for the daily updates on savings, money market, and CD accounts. The latest posting that is trending there is a 2.26% money market from online bank Northern Bank Direct which the bank's website states is guaranteed until June 2019.

It seems like Scott may be considering a reverse 1031 exchange where he buys the replacement property (rental condo) before he sells the relinquished property (residential rental). Dave could probably provide some more details on the mechanics of that type of transaction and its requirements.

@Greg Ford , first and foremost, congratulations on your sale.

For the transactions that you have listed, you should have someone run models for the various scenarios so you can see what the after-tax cash flow is in each case including the net present value. 

In regard to the tax questions, just to give you an example of how things can get complicated very quickly (and therefore it is advisable to speak with your CPA/attorney), you mention that you purchased the property in October 2017 and you were projecting to use the 2.4m of bonus depreciation based on the cost seg. report. I am assuming you are calculating bonus using the new 100% rate. (Correct me if I'm wrong) Under the tax reform changes, the property must be both acquired and placed in service after September 27, 2017. The definition of these terms is important to look at closely. 

The acquisition date is not necessarily the closing date. The date of a written binding contract (as defined in the regulations) is also considered which may cause the new bonus to not apply and rather cause the old 50% to apply. You did not mention when you went into contract and you may have already considered this, but I wanted to make the quick note.

I just wanted to add that the replacement property acquired in the 1031 exchange (property B) needs to be "held for investment" in order for the 1031 exchange to be valid. What this means is based upon all of the facts and circumstances, but if you buy the new property with the intent to sell it, it may not qualify as held for investment. Accountant/attorney consultation is recommended to understand all of the facts.

@Nancy Pfaff, Nice to see there are other like-minded individuals looking at similar markets as I am.

It's funny you mention Hallandale. We bought a condo there two years ago on S. Ocean Dr. (across the street from the beach), as more of a vacation spot, but possible future rental. It was a great time to buy because of the Canadian exchange rate (a lot of Canadians reside there so the exchange rate let the sellers get a great sales price while giving us a great deal in USD).

I know a lot about that area so if you have any questions, let me know. We do have a three year rental restriction (as you have seen) but did not buy it as a rental so did not mind. The carrying costs (HOA, etc.) are so low also which was a big plus.

Hi Ratesh,

1031 exchanges are performed between multiple properties (i.e. multiple properties for one property and vice versa, single property for multiple properties) as long as all of the 1031 requirements are met. It would probably be good for you to speak with your accountant as well as some QIs (qualified intermediaries) about the best plan of action for a successful 1031.

I have worked in the real estate industry for several years now (on the tax / accounting side) and as a result have developed an interest in real estate investing. I am interested in the southeast Florida market because I believe there may be growth opportunities there.

Is there anyone here that invests in the southeast Florida market that has any thoughts on opportunities in the following locations which I have been studying?      Fort Lauderdale, Hollywood, and Davie

Lately, each time I visit I see new high-rise condo buildings being built so I am wondering if there is any risk of too much supply in the next few years. I appreciate your feedback.

Hi David - Have you spoken to your accountant regarding how these expenses have been historically allocated for any financial / tax reporting requirements that you might have? They might already have the allocation for you to use.