with a Capital....

Capital Markets Commentary– September 10, 2024Good Morning!

The risk profile for someone who's a local GC and has worked on structural rehab buying a portfolio in a building is quite a bit different.Also, situations like this where professionals can properly evaluate risk and bring in capital to solve the problem of said older folks is a way to earn income and make a positive impact (assuming you're not low balling the distressed, fixed income seller).

After taxes, insurance and capital reserves I think we'll be around 8%.

@Marc Shinare you an experienced, well capitalized investor? 

We provided the capital needed to purchase the property and cover the $105,000 in renovations.

I  used a brokerage out Orange County by the name of Allure Capital the head broker is KC James.

They shared I could easily sell this unit for 400K+ leaving a sizable gain in the short term.That being said I would face some significant capital gains and I was wondering if I had any options to avoid these.

Most “Gurus”, authors, advisors and experienced real estate investors preach obtaining seller “carry back” financing for property buyers in order to (1) obtain financing when they don’t qualify for a 3rd party loan (2) obtain financing when the property doesn’t qualify for financing and or (3) extend the “buying power” of their capital contribution (down payment) to purchase a larger more expensive property by having the seller provide a subordinated mortgage loan.That’s all and good, but why should the seller agree to finance the purchase of his property, instead of getting CASH for his equity?

My understanding is the seller bought with seller financing significantly below market value and has the capital to pay the near due balloon if needed.The seller is the one who proposed SF due to (I assume) capital gains.