All Forum Posts by: Scott Simpson

There's another option- walk them through a 1031 and how to move that equity to a property that has no capex and will be passive for them. No cap gains, they can still pass the property on to their heirs and not have to deal with the gains or the maintenance. 

If the seller finance they do not pay the capital gains until they exceed their cost bases

this is calculated based off principal payments received but the interest is taxed at ordinary income. Please know I am not a tax professional.

@Scott Simpson This is a textbook example for him financing the deal for you. Ask what he's looking to get out of such a financing arrangement and make sure you incorporate those with rock solid legal documents included to have it be a win-win for everyone

If your concern is tying up rehab budget, communicate this with him to come up with as little down as possible. Since this is a private party financing arrangement, the terms are what you guys settle upon

Potentially consider partnering up with an investor who has done seller or non-traditional financing since they could be an invaluable asset to your team

@Scott Simpson

MTR in Leavenworth are possible. There is a demand for it. The problem is that there are so many STR that can easily just book out an entire month just like an MTR. So you have a a huge pool of competitors. You might get a bit more lucky during the top peak season because STR will get more money renting nightly than monthly....but even then a lot of STR would gladly rent to someone for a month because its less overhead for them and less work for not that much less money.

As for East Wenatchee, STR are much easier to start over there....in terms of there being less restrictions. BUT E. Wen. & Wen. are a good 45-60 minutes from Leavenworth (depending on how bad traffic is and exactly where in the city you are). So guests looking to STR for Leavenworth have to be pretty desperate to rent all the way down in Wenatchee area. It happens but not steady enough to be relied on. 

The Wenatchee area does have some STR draw of its own though. Skiing is a big draw in the winter and the convention center has some draw to it as well. It just not as consistent as Leavenworth. The one plus side is that, currently, the city of Wenatchee, is not a part of the Chelan County STR code. So it does not apply within the city limits. 

I would say in general industrial is still the darling of real estate. Office is dead, retail can be risky, Multifamily and Residential are over priced, STR's are saturated and starting to get taxed and banned, Storage is just okay, and land takes forever to see the fruits of your labor. The real question is how much work do you want to put in to a project vs passive investing? All these assets will perform differently depending on the market you're looking at and the value ad you bring to the project.

I just finished my 2nd DADU but I'm green to RE investing. I'm really excited about being able to do ADU+DADU condos in my county since they just changed the rules. I have plans, engineering, and all the contacts and sourcing for a 1200 sqft 2br/2ba DADU that I just built, and I've identified a property I think would be great. It's being remodeled by a RE investor that intends to flip it, but he seems to have slowed way down with the recent market drop. It wasn't showing sold online so I looked into the records and see this RE investor has recorded a deed of trust and given the owner about 50% of their purchase price for what I assume is the right to remodel and sell.

It looks like I could add an ADU to the existing house and build a DADU with plenty of room to spare, I just don't know how to go about getting this property. From the workers I've talked to I know they're trying to do a really upscale remodel and get top dollar which I don't think can afford outright, but I'm interested in the loan/build/refinance examples I've seen. From that deed it looks like he can't have all that much into it yet, but I'm not sure how that works. It's vacant so it's costing someone money, the RE investor or actual owner I don't know. But I'm wondering if any of this makes them more motivated to offload it or if I could get a deal. Any advice would be appreciated, thanks!

Resort zoned?

@Scott Simpson

MTR in Leavenworth are possible. There is a demand for it. The problem is that there are so many STR that can easily just book out an entire month just like an MTR. So you have a a huge pool of competitors. You might get a bit more lucky during the top peak season because STR will get more money renting nightly than monthly....but even then a lot of STR would gladly rent to someone for a month because its less overhead for them and less work for not that much less money.

As for East Wenatchee, STR are much easier to start over there....in terms of there being less restrictions. BUT E. Wen. & Wen. are a good 45-60 minutes from Leavenworth (depending on how bad traffic is and exactly where in the city you are). So guests looking to STR for Leavenworth have to be pretty desperate to rent all the way down in Wenatchee area. It happens but not steady enough to be relied on. 

The Wenatchee area does have some STR draw of its own though. Skiing is a big draw in the winter and the convention center has some draw to it as well. It just not as consistent as Leavenworth. The one plus side is that, currently, the city of Wenatchee, is not a part of the Chelan County STR code. So it does not apply within the city limits.