All Forum Posts by: George Jeffors

I really, really appreciate all the help and comments. I researched a master lease and for the life of me I don't know why I would want to use that as the seller, the building is easily marketable, no other properties on market currently? Am I missing something - is it to leverage the tax grandfathered advantage ?

The building in BH been appraised at 2m and my mom was really old and let the property get old and tired and did not keep the rents up. I have raised them the max and started fixing up the place and raising the rents the max 10% allowed. Still 15% under market in current condition, and 30% if I renovate the indiv apartments.

I was the executor of my moms estate and maybe I was too cute by half. My sister gets the 700K house and the 1.2 mill fourplex in a California Beach Community. I went for BH apartment because of the upside.

OK - so I work in title and HOA field, I am 56 years old college grad and I just want to end up in the same position as my sister (owning a nice home and having the income from a paid off 1.2 million fourplex would put me on equal footing and match my own life change objectives.

My personal situation is complicated. Since my divorce a few years ago I have settled into a long term relationship, having lived together for a couple of years, and I am proceeding as if we are married. She is also recently divorced, she earned a million dollars a year Realtor before the crash in Nevada, her divorce, ex... and the Real Estate bust left her with IRS debt and destroyed credit and she has financial obligations to college kids in the short term (PS - we met and moved in together before I inherited the money and while she was not working dealing with a medical scare- so no gold digging here.)

However- we are sensitive to appearances and she insists anything I buy be in my own name and that if anything happened to her I could afford it on my own. I prefer to move to Calif and start over, get out of town, leave the misery behind etc. We are both 6 years away from early Social Security - and my kids are out of college and doing well. Plus my ex is a physician and will look after them as well.

My gal says I should take a million dollar life insurance policy to protect my kids since all my 2m in assets (not incl 400K - 100 k cash and 300K 401) are in one basket). Not by design, however we have three dogs in our new family- so renting may be problematic, as well as her credit score. She used to be a SVP of sales for a fortune 100 company and is a go getter - so I think we will do okay selling residential real estate in San diego. She left the business for a few years due to a health scare which has since passed and says it does not make sense to start back in RE in Nevada and then move in 4 months - so she is out of sorts waiting to get started, while I sort this out. I think she is too embarrassed by the fallout of her messy ugly divorce to stay in town and be happy. She wants to get started but after losing her last relationship to divorce she refuses to go out to California and get started without me ...

Her initial advice was to not borrow or sell building (I think because it creates a bad appearance to family and friends). She said let's move into one of the apartments for a year, fix up the place and get it ready for sale while getting our RE career going out there. Moving out of 3000 square feet with three dogs into a one bedroom seems crazy even though I fixed up a unit to be an owners suite this month and heck it is Beverly Hills. The traffic is miserable though and the density is crazy.

She said if I want to borrow against the building I should by a business like a laundry mat - and hire a manager and make a 10% return instead of 20% - or a bed and breakfast, or weekly beach rentals and she will rent them out for me and we could live in one, at least we would be at the beach....

I appreciate the comments about being a Beer and Pretzel millionaire - however my story has a little more detail so I wanted to provide this followup. We have both lived materialistic lives chasing the dollar, raised our kids in the best schools and neighborhoods. At 56 years old - I have owned the cars, travelled the world and put my kids in a good position. Now having been wiped out by divorce and Real Estate Crash - I don't feel motivated to be filthy rich anymore. I want to live at the Beach and get up in the morning and work casually at something I love (RE) and be with my significant other. I lived a hard life, played hard and don't want to drop dead at 60 of a heart attack like my DAD!

So that is my full story, any additional thoughts?

Thanks

I just inherited and took title to a 2 million dollar 7 unit apartment building in Beverly Hills. I had been managing it from Nevada for several years prior to my mom passing and last year we put a100K into it in roof, windows and remodel. Rents are below market by 20% and rent control limits the ability to catch up immediately - so building may still have upside, it is an easy to sell A property in an A neighborhood, very hard to replace. Also have grandfathered tax savings of roughly 7500 per year,-buiding is 3.5% market cap, I live in Nevada and do the property management myself and use a local handyman. I am getting lots of advice to sell building and invest in higher market cap, have thought about buying a business just can't seem to find the passion, and lot's of people tell me to keep it.

The scenario I need help with is as follows.

My goal is quit my job in Nevada were I earn 50K working 3 days per week ( My Boss will work with me if I attempt to qualify for a loan in CA before I completely quit) I found my dream home to purchase, a 800K home in Encinitas California with an Ocean View. I would like to become a Realtor, sort of working retired.... My income is as follows
50K salary in NV
25K Spousal Support for another 18 months
75K Net income from Building in BH

My current home was under water, but recently it recovered enough so I can sell and come away with about 25K - my current mortgage is 425K and my divorce agreement dictates I sell or purchase in my own name within 12 months as my ex is still on the loan. I just can't figure out how to make this happen.... I will have about 100K in cash on hand, and 300K in my 401K.

How do I finance this change of life, do I rent for a while and wait until I have a Real Estate income to borrow against, do I sell the building and buy the house and a 1.2m rental property close to san diego. (maybe weekly beach condos ?)

Should I attempt to get some conventional financing in CA claiming I work 3 days in NV, should I buy something else in NV before I move as another door in my inventory? I am scared at the concept of borrowing 1m against the building with a 10 year term before variable 20 years.

Can I borrow 400K against building and qualify for a residential mortgage for the other 300K with 100 K down.

All ideas are appreciated