.- Unrecaptured falls under section 1250 and is treated as ordinary gains and capped at 25%- My capital gain from appreciation and improvements under section 1231 was treated as a long term capital gain since I owned both assets over a year.Hope this helps.

What drew me to Detroit initially was the potential for strong cash flow, but I’ve also seen appreciation in several of my properties as the city continues to improve.

I’m buying to improve the property, listing, service, etc so i do it right away.

I recommend researching the average appreciation over the past 10 years in your target area to get a clearer picture.As you know, in real estate, ROI comes from multiple sources: Home Appreciation:  Reno Appreciation: Value added through renovations or improvements (usually just in the first year).

You could have as well restructured deal and provided deal improvement instead of trying to milk 5-6+% commissions on the new deal from invetors.

I do see lots of self storage and warehouses going up, so my default assumption would be that the old shopping malls do NOT trade for less than build cost, but it's possible that the marketplace is not perfectly efficient. 

@Dennis Bragg, how did you factor improvements and market appreciation into the buy-back price?

The more rational you are, the better the outcome.Practice and LearnLike any skill, negotiation improves with practice.

This experience reinforced the need for efficient budgeting and timely execution to ensure profitability.

I have improved my vetting skills quiet a bit in the last year, so things are more stable now.