All Forum Posts by: Tanner Glenn

Following along... interested in any other details about your deal that you'd be willing to share. 

Keep in mind there are timing rules on a 1031 exchange. You have to identify the new property within 45 days of the sale. You then have to be sure to close within 180 days of the sale date. You'll need to plan carefully to execute your strategy, but it is doable. Good luck!

 Or supply could be increased. What is preventing additional development for which there is clear demand?

 Sleepy little towns can move very slowly at times. It sounds like a failure of government to address the issue. Either free up supply, or regulate the increase in demand. Rentals are scarce in my area too. Much of our demand comes from people being priced out of Atlanta and moving down to Macon. Many of them are commanding greater salaries than others in Macon by working remotely. Now many native to Macon are being priced out. This is my point. Not all demand increases are from STRs. We also have a strong medium term rental market because of the shortage of nurses. All of these changes in demand are disruptive to the status quo. I think many in Macon are excited by the influx of new residents because Macon has been down for decades and seems to be getting revived. I am sympathetic to those who see the changes coming to their towns as being for the worse. However, I don't see the situations being different at their cores. Progress leads to change.

If this is a morality issue for SFRs, then it must also be so of LTRs. As I understand it, an increase in demand in excess of supply leads to an upward price change. In this thread, we are discussing the increased demand caused by the STR business model being deployed in areas that had equilibrium prices at one level, but are now experiencing increases in price due to this new demand. There are certainly small markets that have been disrupted in this way across America. However, I don't understand how this price increase differs from the price increases in other markets, like San Francisco, where demand has regularly outpaced supply even before STRs were a thing. If it is an issue of morality in the one instance then it must also be so in the other. Or it is not an issue of morality in either case, but merely an inconvenient and undesirable (by some) phenomenon. To which, I agree, would be an item for local governments to address and manage according to the desires of the citizenry.

https://www.adventuresincre.co..

I recently stumbled upon this site. It's very high level but you can start with the basics and work your way up. I purchased the multifamily value add spreadsheet and have been exploring/reverse engineering it for the last few weeks.

Great job!

just curious... what rents are you getting in each unit?

If a 1031 exchange isn't an option, you can still consider investing the proceeds into another rental this year. Bonus depreciation rules are still favorable enough that you could more than offset the tax liability of the gain on sale. Keep in mind, bonus depreciation may not be adopted by NY so the tax benefit may be limited to your federal taxes.

Another way to look at it is the first money reinvested is your basis from the sold property. You have to reinvest the entire basis before any gain can be deferred. I think you may have this backwards in your strategy. It sounds like you want the first money reinvested to be the taxable gain portion of the sales proceeds and you pocket the gain proceeds. The IRS won't let you treat it that way. 

If the cash payments you are receiving are taxable, your K-1 losses (includes depreciation) will almost always offset that income. 

If the cash payments are not taxable, your K-1 losses won't have any income to offset and you'll carry them forward until there is income to offset. That may not come until the property is sold, but you won't miss out on those deductions so long as your CPA keeps track of them year to year.

That is overly simplified and makes a lot of generalizations but I hope it helps.