All Forum Posts by: Peggy Beauregard

If you have to pay cash and get a loan, get a discount because you are now paying unnecessary  interest. Plus all the rehab work needs to be discounted from the retail price. You are not buying retail when buying from the family. You can make payments to them over time at no interest. And Industrial should be a higher cap of 6%. Do not use an appraisal done for death. It is set high for capital gain purposes. Get a new appraisal regarding all the rehab, expenses and it is a distressed sale.

My concern is the place the trustee puts the money. The trustee charges an annual fee and the "carryback seller" (how the 453 is set up is carryback note instead of an IRC 1031) receives payments if they want. The Co. with whom I spoke says the owner would receive about 6% annually. If it were my money, I would want it invested in 10-20% returns secured by real estate. I cannot find any info about what say the "Carryback Seller" has to protect the note return, where it gets invested and inheritance process. There are lots of videos about why to do this and advantages. What is the structure? What influence does the "Carryback Seller" have? Thanks.

Your margin is too tight in my opinion. Your agent needs to be working wholesale off market. You did not say where you live and why you consider your market is not good. Read the book Acres of Diamonds by Russell Conwell. Maybe with the right coach, you live in acres of diamonds. Being new and going out of state causes different headaches then the ones you can drive to in a few minutes or hours. As a thought, Consider Commercial in your area like an industrial park. Easier to manage, longer leases, tenants pay for upkeep thru their CAMs (common area maintenance) fees. 

Hi Joshua, Find a mortgage broker. They know where to find the best rates and work with nationwide companies. Be sure you put 6-9 months reserves away to cover any vacancies including taxes, utilities and insurance. Make sure tenant is carrying insurance on their possessions. The HOA is paying for all the items you listed. Make sure the reserves in the HOA cover roof, replacement of balconies and other items. A good HOA sets the reserves to cover all replacements and insurance without calling for a capital fee from the homeowners. And consider sitting on the HOA board. Best to you and congratulations on jumping in.

Thank you each for your comments. They were all very helpful. 

@Eamonn McElroy comment was the most helpful. "It must be in the operating agreement". I didn't know that was economic substance. I don't know what substance it is Michael Plaks and how one would show it to be substantial. Appreciate every comment. After these many years there is always something left to learn. Thank goodness. How could anyone know everything. Have a great weekend.

A syndicator has told me they can give a better return to IRA investors as they don't need depreciation and her accountant does this type K-1 schedule. This would mean the people investing from their personal savings would get a bigger write off and less cashflow the way this is structured.

Other Syndicators get their cost segregation in place and then give a higher cashflow return to the equity partners. 

This sounds the opposite to me. And a confused mind says "NO". I need to be able to explain to potential partners.

As the real estate matchmakers for your financial freedom and a long time real estate investor, I like creativity.  If any CPA could give me the IRS code or supporting information, I would appreciate it.

If this is true, why aren't all the syndicators having their CPAs doing this type of accounting for their equity partners? 

It seems a great disadvantage at the time of sale to the investor who used personal funds as most syndicators do not 1031 to avoid taxes. This means all depreciation must be recaptured.

I thank you.