All Forum Posts by: Eric C.

@Leslie Pappas: Can you please clarify the following points about a DST

1) What is the typical hold period and is there a way to exit early.

2) What is the typical cash on cash return and IRR.

3) Any limitations in terms of investment amount and equity in the relinquished property?

@Crisantos Hajibrahim: I think your contact got VERY lucky on those Phase 1 purchases at PP.  I think the 1MM net number might be a bit on the high side due to transaction costs + landscaping + upgrades.  I follow this neighborhood daily and haven't seen any examples of such extreme appreciation.  The only neighborhood that has done this is Laguna Altura and even then 500k/property net gain would be corner cases.

Look at the next phase of GP, Beacon Park.  You will see nothing close to the appreciation potential that PP had due to the initial high start price.  In fact, you will see price drops + extra builder concessions to get inventory moving.  Hopefully your friend didn't load up in BP.

@David Dye

Does it matter if I go with a direct lender?  Also, I thought the rule of thumb was 6 months, not 1 year.  Where would I see this info?  

I think 6 months is general cut off for the lender to get fully paid.  I just used 6 months as an aggressive target date, but it should be longer since I can only put the property on the market in March.  

@Bill Exeter: If I sell the condo and then do a refi on the 2 replacement properties, wouldn't that be 2x the loan costs versus just refi'ing the original condo? 

Just to add one more winkle in this situation, I actually closed on an out of statement investment property this month and would like to use the cash-out refi to replenish my cash reserves.  I believe this would fall under the "independent economic significance" guideline from the Garcia vs. Comm ruling.

To clarify a bit more, my current investment condo over 300k in equity (<45% LTV) so I don't want the full equity tied up in the 1031 exchange next year. Ideally, I would want to use as little as possible (ie. 25% down on each 275k property). My only fear is that the IRS will consider this boot. However, I haven't been able to refi these last few days due to the litigation.

Also, I'm not worried about the closing costs for the cash out refi.  I would just take a higher rate to get enough lender credit to cover all fees/costs.  My holding period would be less than 6 months anyway.

9/12 was the official COE used in all paperwork so all fees/interest/taxes started on this day.  I could not get a very good explanation about this from anyone involved in the transaction.  I basically got, "it's just the way it is".  

My investment condo has been in litigation against the builder for construction defects for almost 4 years and finally settled last month. I'm wondering if I will have problem doing a cash out refi now (LTV is <45%) since I plan to do a 1031 exchange next year . I just purchased an out of state rental this month and want to extract the down payment from this investment condo.

I'll put it on market in March 2017 and do a 1031 exchange with 2 out of state properties.  

So the lender is going to eat the interest when the wire came in on 9/12?  If it is when the property records, then all the paperwork will need to be re-done and re-signed.  Don't think that's going to happen either.

Got an interesting situation.  COE was dated 9/12.  Lender funds arrived 9/12, Buyer funds arrived 9/13.  Some lender conditions were not met, but lender gave authorization to disburse the funds 9/13.  Escrow company is not disbursing until last piece of signed paperwork is received which will be 9/16.  Once received, escrow company will record.

What date does the new buyer start paying

- HOA dues

- Interest on the loan

- Property Taxes

- Property Insurance