I will like to know how you guys think his administration will affect Real Estate and Investors. I have listened to diverse opinion on this from folks that are not investing in Real Estate but I will like to hear from Investors and Real Estate Professionals. As a Real Estate Agent and Investor from Houston Texas, I have received calls from clients seating on the fence to see who win the election. How will this affect the General Buying and Selling of Real Estate? Do you think Joe Bidden will save foreclosures in 2021? Do you see any big changes in the next few months?Should New and Experience Investors buy if the number works of wait for few months to see how his policies will affect Real Estate? Please support your opinion with facts if possible. Appreciate your meaningful contributions. Thank you

Focus on deal flow and your criteria. Everything else is noise.

Increased cap. gains tax and higher taxes on all other aspects of our lives. And no, it won't be just on those making over $400K.

To the level that the vast majority of us operate, you will not see any real change. Biden (just one 'n') has a lot more on his plate than to worry about our segment of real estate. To be fair, I cannot think of any modern President who had a profound difference on real estate investing. So Capital Gains rate goes up a little or down a little or perhaps lending tightens or loosens a bit....so what? Will that make anyone say, "I'm never investing again!"? No. Keep doing what you're doing and don't sweat it.

The real action is in the Senate. Assuming Tillis wins in North Carolina, the Republicans will need to win one of the Georgia run-offs (Perdue or Loeffler) in January to control the Senate. If they achieve control, you will likely see few if any changes affecting real estate investors for at least the next two years.

Biden HAS announced that he is going to end the 1031 exchange and the basis step up for inheritances. Changes to those tax laws will have profound impacts on many real estate investors as it will kill deal flow. A lot depends on Georgia.

@Wale Lawal tough to say. As a Trump supporter I will try to keep my response without emotion. Biden has stated he wants to rid 1031 which directly impacts RE investment. Biden has said he will listen to scientists and will shut down the economy if they say to do so. Who knows how he would respond to rent moratoriums and mortgage moratoriums. Interest rates will stay low per the Fed. His side of the isles policies would favor the tenant overall so that could be nationwide or per state. The Senate is our saving grace in hopes it stays red.

I doubt it will be different than with Obama. The biggest problem regardless of who is in charge will be covid.

@Wale Lawal I think the Democrat’s self stated goal of printing as much money as possible will do what we have already seen - increase the value of assets.

Think about it logically. The 1031 is an exchange to larger properties. If you take away the benefit for people with larger properties to do an exchange, it ripples down to smaller properties. The person with a 60 unit chooses not to sell, so the person with a 10 unit has no properties to buy. The person with 10 unit properties holds, so the investor with duplex and quads has nobody to buy from. Personally I think there are far worse things in the Biden tax plan than this. The corporate tax increase will affect most every American. Everyone in this country either works at corporations, buys from corporations or invests in corporations through their retirement accounts. If a corporation is faced with tax increases they have three options: 1. Take lower margin, which affects company value, stock price. 2. Increase prices, which affects consumers. 3. Decrease expenses, which the number one expense for companies is employees, which means layoffs.

Will most likely bring back state and local tax deductions (SALT, property tax deductions) that were taken away

How Will Joe Biden as US President Affect Real Estate

Mick Hofmann

Real Estate Agent · Scottsdale, AZ · Member since 2018 · 46 posts · 22 votes

5y

I think it should also be noted that individual states will be affected based on the election results. For instance, here in Arizona we just passed Proposition 208 which will increase taxes for people earning more than $250k and $500k as married persons filing jointly. I heard of a guy who was in the process of moving his company here to AZ and was under contract on a $7 million dollar house. Prop 208 passed and he pulled out on both the house and moving his business.

2 Reply

Will GastonPro Member

Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes

5y

@Wale Lawal

Does it matter who the president is if you can buy property under market value?

Macro issues seem to be a huge mental hurdle for a lot of investors but that is largely out of our hands. I'm not saying who the president is isn't important. But it's more important to focus on what you have the best chance at controlling. In my case, that would be finding more deals and adding more value.

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Wale LawalBusiness Member

OP

Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

5y

Originally posted by @Will Gaston:

@Wale Lawal

Does it matter who the president is if you can buy property under market value?

Macro issues seem to be a huge mental hurdle for a lot of investors but that is largely out of our hands. I'm not saying who the president is isn't important. But it's more important to focus on what you have the best chance at controlling. In my case, that would be finding more deals and adding more value.

Yes focusing on Deal Flow is the KEY.

Just that the policies have a way they shape our investment and potential cash-flow, appreciation and returns on investment.

Thank you

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Joe Bertolino

Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes

5y

Originally posted by @Andrew Syrios:

Probably not a lot. It's possible he'll go after 1031 exchanges and maybe (although I highly doubt it) the mortgage interest deduction. But likely, the only major change will be a slightly higher capital gains tax.

On the plus side, Biden being in office will take the wind out of the far Left I suspect, which will mean less crazy local ordinances banning evictions, wildly restricting tenants screening, etc. (At least, I hope so.)

"Making" $400K and having $400K+ on your tax return are two very different things, especially for real estate investors. I know some very savvy investors with millions in equity showing six figure losses year after year. Often due to Like Kind 1031 exchanges and a cash out refi.

As much as the right and left argue over issues... the top 1% on both sides are not trying to do away with a major tool for them to retain wealth. I think the talk of going after 1031 exchanges was a way for Biden to shine light on Trumps tax returns... not that he is actually going to do it. As was mentioned in a post above, it was not even mentioned in Biden's housing plan.

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Thomas Dewitt

Chattanooga, TN · Member since 2017 · 3 posts · 1 vote

5y

I am confident that Joe Biden will have absolutely no affect whatsoever on real estate investing!

1 Reply

Wilson Auyeung

New to Real Estate · NY · Member since 2019 · 18 posts · 2 votes

5y

I’m hoping to see a crash sooner than later. I am looking to buy my first home in New York City and those who know the prices can feel my pain. It’s harder to find good deals here. Also looking to find a team to help me

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Guido Nunez

Investor · Los Angeles, CA · Member since 2019 · 38 posts · 22 votes

5y

@Wale Lawal in my opinion no b/c he doesn’t control the full senate.

0 Reply

John CasmonPro Member

Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes

5y

Biden’s policy is mostly on making housing affordable and eliminating discriminatory practices. However, he has stated that he wants to end the 1031 exchange, step up basis (for inheritance), and even bonus depreciation.

Talk of eliminating the 1031 Exchange dates back to the Clinton administration. This has been in place for almost 100 years, less likely this can be removed without strong opposition but it’s possible. The bonus depreciation on the other hand, especially the accelerated version from the last tax reform by Trump can certainly be in jeopardy as it’s set to expire (believe in 2022). It’s doubtful that this is renewed, so commercial investors who have been using cost segregation to accelerate depreciation may be at risk.

5 Reply

Andrew SyriosPro Member

Moderator

Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes

5y

Originally posted by @Joe Bertolino:

Originally posted by @Andrew Syrios:

Probably not a lot. It's possible he'll go after 1031 exchanges and maybe (although I highly doubt it) the mortgage interest deduction. But likely, the only major change will be a slightly higher capital gains tax.

On the plus side, Biden being in office will take the wind out of the far Left I suspect, which will mean less crazy local ordinances banning evictions, wildly restricting tenants screening, etc. (At least, I hope so.)

"Making" $400K and having $400K+ on your tax return are two very different things, especially for real estate investors. I know some very savvy investors with millions in equity showing six figure losses year after year. Often due to Like Kind 1031 exchanges and a cash out refi.

As much as the right and left argue over issues... the top 1% on both sides are not trying to do away with a major tool for them to retain wealth. I think the talk of going after 1031 exchanges was a way for Biden to shine light on Trumps tax returns... not that he is actually going to do it. As was mentioned in a post above, it was not even mentioned in Biden's housing plan.

I agree. Taxes will likely go up a little, but nothing particularly drastic. And local pressure (in blue states at least) will likely ease up as they don't have to show how anti-Trump they are anymore.

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Rachel S.

Investor · Los Angeles, CA · Member since 2019 · 127 posts · 63 votes

5y

Originally posted by @Brett Tvenge:

Originally posted by @Account Closed:

The administration's affect on real estate will depend the unemployment rate and businesses shutting their doors due to COVID. I personally don't see much of a price decrease for homes in 2021. It takes a LONG time for homes to decrease in value. Its not a stock. Look at 2008-2015. Housing market started massive foreclosures in 2007 but the housing market didn't hit rock bottom prices unit 2015 in most areas.

That might be for your market, but extremely false in the Phoenix Market. Home prices plunged immediately.

Same for Los Angeles. From my memory, it started to get really bad in 2009, the bottom was around 2012-2013 and I would say it took until 2016 to fully recover

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Wale LawalBusiness Member

OP

Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

5y

Originally posted by @Bob Okenwa:

There are deals to be had in every market, in every market cycle, and under every president. Please don't let politics affect reasoning. Make smart decisions and buy right and you should be okay regardless of who resides at 1600 W Pennsylvania Ave.

Smart contribution Bob,

I definitely believe in that investment philosophy and that's exactly what I am doing. Just been seeing some newbie investor using this as an excuse not to take action.

Thank you and let's connect.

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Wale LawalBusiness Member

OP

Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

5y

Originally posted by @John Casmon:

Biden’s policy is mostly on making housing affordable and eliminating discriminatory practices. However, he has stated that he wants to end the 1031 exchange, step up basis (for inheritance), and even bonus depreciation.

Talk of eliminating the 1031 Exchange dates back to the Clinton administration. This has been in place for almost 100 years, less likely this can be removed without strong opposition but it’s possible. The bonus depreciation on the other hand, especially the accelerated version from the last tax reform by Trump can certainly be in jeopardy as it’s set to expire (believe in 2022). It’s doubtful that this is renewed, so commercial investors who have been using cost segregation to accelerate depreciation may be at risk. I just did an interview talking about this very topic.

Solid points you have made here.

Can you please share the link to your interview so we can learn one or two things from it?

Thank you

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Luka Milicevic

Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes

5y

My guess:

He is a seasoned politician. A lot of bark and not a whole lot of bite.

Billionaires will continue to pay less than their secretaries, corporations like Amazon will continue to have shell companies overseas and not pay any taxes.

Government is just a partner that you don't want, but have to have. Whatever they do, we will adapt, achieve and overcome.

Real estate has been a good investment vehicle since the beginning of time and will continue to be until the end of time regardless who is in charge.

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Jeyo PunnakottilPro Member

Rental Property Investor · Houston, TX · Member since 2019 · 141 posts · 48 votes

5y

@Guy Gimenez ... Yea on his tax policies Biden says all those but he wont be able to bring it to action as long as republicans have the senate...

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Dion Rainey

Flipper/Rehabber · Washington DC · Member since 2018 · 8 posts · 12 votes

5y

It really doesn't matter who's in the White House as it relates to RE Investing. It's all about having an investment strategy flexible enough to adjust as the market adjusts.

3 Reply

Mona Lisa Harrison

Real Estate Consultant · Greenville, SC · Member since 2015 · 45 posts · 35 votes

5y

From Inman News about Biden policy:

The Biden campaign’s housing proposal
pinpointed the dearth of housing supply as the driving force behind the
affordability crisis. In response, Biden has pledged to invest $640
billion in housing over the next 10 years. Among other things, the plan
would provide “financial assistance to help hard-working Americans buy
or rent safe, quality housing.”

The plan also calls for increasing supply via “investments in
resilience, energy efficiency, and accessibility of homes.” Moreover, it
promises more construction and the refurbishment of affordable housing
units through the establishment of a $100 billion Affordable Housing
Fund, which will include a $20 billion investment in the federal
government’s Housing Trust Fund, among other investments.

Biden’s housing proposal tackles “redlining and other discriminatory practices” in the housing industry head-on, devoting a substantial portion of his proposal to these topics. He specifically wants to create a “Homeowner and Renter Bill of Rights,” modeled on a California law, that among other things would apply more regulations to lending and foreclosure processes. The bill of rights would also prevent landlords from discriminating against tenants who receive federal housing assistance.

In a departure from the current administration, Biden’s plan seeks to rollback “Trump Administration policies gutting fair lending and fair housing protections for homeowners.” He also plans to to eliminate local regulations such as exclusionary zoning, which “perpetuate discrimination.”

Housing-related taxes

Biden has said that if elected he will roll back Trump’s tax cuts, presumably including deduction rules for things like mortgage interest and local and state taxes. His plan also specifically states that his overall $640 billion investment in housing will be “paid for by raising taxes on corporations and large financial institutions.”

Additionally, Biden plans to give first-time homebuyers a refundable, advanceable tax credit of $15,000. This would assist people in buying homes at a point in their lives when they often don’t make enough money to qualify for other kinds of tax benefits, and would allow first-time homebuyers to receive the tax credit when they make the purchase instead of having to wait to receive it the following year.

Homelessness

Another entire section of Biden’s housing proposal is dedicated to homelessness, stressing “a national strategy for making housing a right for all.” The proposal calls for emergency funding for things like shelters and vouchers; policy reform to prioritize a “housing first” strategy to solving the issue; and special policies for certain groups such as veterans, LGBTQ individuals and the disabled.

1 Reply

Salvatore Lentini

Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes

5y

The global pandemic will have much more of an impact on real estate than any one politician can make. There is opportunity out there, you just have to find it. I'm looking at getting creative on my next few purchases. Buying something and changing its use or adding units/buildings to larger commercial properties...2021 should be interesting.

1 Reply

Guy Gimenez

Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes

5y

@Jeyo Punnakottil

I won't underestimate the depths of his willingness to use E.O.'s for most any agenda he wishes. We should look at what is going on right now with this election and understand just how driven he is to promote an agenda. Sure, the Senate and can try to stop him but the Repugnants have always been mostly spineless when they come up against a determined Dem. I wish I had your faith...but I do not.

0 Reply

Doug Spence

Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes

5y

Originally posted by @Bob Okenwa:

There are deals to be had in every market, in every market cycle, and under every president. Please don't let politics affect reasoning. Make smart decisions and buy right and you should be okay regardless of who resides at 1600 W Pennsylvania Ave.

@Bob okenwa Well said! I agree. There will always be deals to be had, but they will look different than they did 10 years ago, 5 years ago, and even 1 year ago. We as real estate investors and business owners must continue to learn and adapt with the times, as we always have.

0 Reply

Joel Schneider

Member since 2018 · 4 posts · 1 vote

5y

I’m most interested to see if any tax changes occur. I have a feeling that will be a pretty low priority for the administration, however, as neither side of the aisle seems to take too much issue with the changes.

It would be good for the country, and certainly good for my home San Diego market, to get some federal incentives to support the building and maintaining of low income housing. I’d love to be part of the solution to our housing issue in SD.

0 Reply

Matthew Mazur

Real Estate Broker · Los Angeles, CA · Member since 2020 · 46 posts · 18 votes

5y

@Dan Bass that’s exactly right - the 1031 exchange is huge, it is the main motivation for most sellers. As a community we need to work to protect this financial instrument.

A republican controlled senate will block this, but it really shouldn’t be on the table. As a country, we have left it to investors to build our housing infrastructure and yes, housing is critical infrastructure. The 1031 exchange is one of the main mechanisms that both encourages fluidity and keeps capital reinvested in US real estate. Ending this portion of our tax legislation is, effectively, divesting in our RE infrastructure by diseensentivizing sales (and therefore redevelopment). Your fix and flip doesn’t just put money in your pocket, it improves a neighborhood and provides working professionals with quality turn-key housing.

I am literally a card carrying Dem, but everyone in the RE industry should be aware of this issue and should lobby their reps.

1 Reply

John CasmonPro Member

Cincinnati, OH · Member since 2013 · 1k+ posts · 1k+ votes

5y

Originally posted by @Luka Milicevic:

My guess:

He is a seasoned politician. A lot of bark and not a whole lot of bite.

Billionaires will continue to pay less than their secretaries, corporations like Amazon will continue to have shell companies overseas and not pay any taxes.

Government is just a partner that you don't want, but have to have. Whatever they do, we will adapt, achieve and overcome.

Real estate has been a good investment vehicle since the beginning of time and will continue to be until the end of time regardless who is in charge.

Agree here. I looked up Biden's biggest campaign donors and two of the top four were Deborah Simon (of Simon Malls) and George Marcus (of Marcus & Millichap). I'm not implying that this means anything, but my guess is he will at listen to these two, if not the rest of the industry.

1 Reply

Aaron ZimmermanBusiness Member

Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes

5y

I think commenting is a bit misguided but here's my prediction with the crystal ball I have. If there is divided government, nothing will get done. If there is a democratic majority, taxes are probably going up (which they should) on the wealthier americans. There will also hopefully be an increase in the minimum wage. Assuming these policies go into place, this would help the average american and real estate investor because the average american would have more money and there would also be less vacancy/late rent. Just one mans opinion. Unless you're in the top and doing well, it will largely be a benefit.

Overall, don't count on the government to do things. Keep calm. Find good deals at reasonable valuations and build your portfolio.

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Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

5y

Well i just lost a awesome post to the ether :(
i dont think Biden will be as bad as some think. In fact I think markets will think positively about a more stable govt and this will be a positive effect on the markets

Campaigns are for stating your dreams, once you are in office you get to work and try to accomplish what you can. Given how diverse our country is the laws and policies enacted will be non radical is my prediction.

As for 1031s - they are not rare and they are not just for the rich. An example - i went from a property with a basis of 100k (land as bldg had been almost fully depreciated) to trading up to mid 7 figure purchases. This is what makes RE so powerful. You can delay cap gains and you can write off the cost of the bldg (depreciate)

I guess I just think folks are overreacting. If taxes go up a little bit - we will survive. Just look at how prices have risen due to trade wars. And most folks dont even notice.

Be the best person you can be - shop local- support your local economy, have a decent cash reserve and things will work out!

2 Reply

Davidsito Ramos

Member since 2020 · 1 post · 0 votes

5y

@Wale Lawal - Biden is spelled with (1) “D”

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How Will Joe Biden as US President Affect Real Estate

How Will Joe Biden as US President Affect Real Estate

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Housing-related taxes

Homelessness