HELP -NOT MUCH TIME!

1031 Exchanges
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HELP -NOT MUCH TIME!

Dave Simpson
Investor · Salem, OR · Member since 2014 · 19 posts · 1 vote

I received an unsolicited offer for some pretty out-of-state. Decided to sell, but now I am in a quandary. I have a very short and to identify and purchase the new property here - and missing the Steadley would be disastrous tax -wise.

The question is this, do I contact many real estate agents or try to stick with just one. It vantage of using several's office, but some real estate agents recent you working with other agents. 

Also, how does anyone make this kind of a decision on a short time frame. Inventory in the Salem Oregon area is down, and of course that is a real problem. I have tried looking in surrounding areas (within 40 miles) but do not want to purchase apartments in areas that I cannot adequately service within a reasonable driving time. 

I am looking for apartments in the 20–40 unit area. If I do identify properties, do I make offers to all of them some of them or just a select one or two. If you only make offers to a select few, if they fall through, there icould be a real problem.

Who knew that receiving an unsolicited offer would be such a problem!

HELP...

Dave

MODERATOR:  NO DEALMAKING IN THIS FORUM, PLEASE.  THIS POST IS SEEKING ADVICE, NOT PROPERTIES.

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Steve Babiak
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
12y

Has the closing on the sale of the relinquished property happened yet?  If not, start with seeking an extension of the closing date. 

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  • Leslie Pappas
    Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    12y

    hey Dave- Contrary to what the gentleman said regarding DSTs being a last resort, I have clients each week buying DSTs as an investment CHOICE.  It must be mentioned, however, that DSTs are not for everyone, and one must be an accredited investor to participate. 

    Best- Leslie Pappas

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  • Dave Simpson
    OP
    Investor · Salem, OR · Member since 2014 · 19 posts · 1 vote
    12y

    Leslie,

    As I asked Brian, I need to get additional information ASAP. 

    Can you point me in the direction to get this information?

    Tnx, 

    Dave

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  • Juan Covarrubias
    Real Estate Broker · Murrieta, CA · Member since 2014 · 27 posts · 4 votes
    12y

    Dave.... There are several single tenant nnn properties available. Have you given this a thought? There is a decent amount of inventory available. 

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  • Brian BurkePro Member
    Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
    12y

    @Dave Simpson please don't mistake the following for legal or tax advice, use your own consultants and advisors for that.  But, to summarize:

    The IRS analysis and conclusions related to DSTs are summarized in Revenue Ruling 2004-86 which was issued in 2004 in response to two cases in the Second Circuit Court. These cases and the Revenue Ruling opened the door to the DST as a vehicle for 1031 exchanges.

    In the past (well, even now to some degree), investment sponsors would utilize a Tenant In Common (TIC) structure as a form in which to offer a sponsored investment to 1031 exchange clients. In a TIC, each investor owns a deeded fractional interest in the property. The problem here is that each TIC investor may be required to sign on the loan and all decisions to sell or refinance require 100% consensus, which can be very difficult to obtain.

    The DST solves those problems because there is centralized control by the DSTs trustee (the investment sponsor in most cases) and it is the trustee who signs on the loan and executes the deed upon sale.

    I also agree with @Leslie Pappas that the DST is not simply a last resort. It is also an investment of choice for folks that no longer wish to be in the business of direct property ownership and management, or for people that have an exchange but are unable to qualify for financing for some reason. There are a multitude of reasons why a DST is a good option for some, but as previously stated, they aren't for everyone.

    DSTs are typically sold through licensed securities broker/dealers.  Reach out to @Bill Exeter on BP or your exchange intermediary, if you already have one. They should be able to point you to sources that can present you with DST options from which you could choose.

    Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)
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  • Leslie Pappas
    Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    12y

    I can also help, as a Registered Principal for Direct Placements, if you wish.

    Best- Leslie Pappas

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  • Account Closed
    Clinton, MD · Member since 2014 · 50 posts · 20 votes
    12y

    This has been a great thread - I've learned a lot. I will be in a 1031 exchange situation in a couple months and have been worried about where/what to buy if I get close to the time expiration.  I am not particular as to the location of my next purchase (we are military and move all the time, so I always hire PM), but I do want something that's at least good cash flow, if not excellent.

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  • Dave Simpson
    OP
    Investor · Salem, OR · Member since 2014 · 19 posts · 1 vote
    12y

    Brian,

    I will ask my accomodator about the DST option. Sounds like a great option.

    I'll let you know what she says and if I have questions, ill ask.

    Thanks for the information...

    Dave

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  • Dave Toelkes
    Investor · Pawleys Island, SC · Member since 2008 · 1k+ posts · 837 votes
    12y
    Originally posted by @Dave Simpson:

    Took a class today on 1031 exchanges - learned a lot. It seems the deal on the 1031 exchanges are made when you identify properties over when you close on them. And the number and amount of properties are limited also. 

    I don't know exactly what you were taught in the class, but the 180 day clock  on the exchange starts on the settlement date for the replacement property.  From the settlement date, you have 45 days to identify your replacement property, then another 135 days to complete the acquisition.  

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