Sell Single family portfolio

Investor · Cypress, TX · Member since 2016 · 3 posts · 4 votes

Hi all,

We have a fairly large single family rental portfolio that we have built up over many years in the Houston Tx area. I'm considering selling the entire portfolio. Not sure where to start and whom to call. Any advice / guidance on best UPREITs, 721 exchanges, maximizing portfolio selling price, reducing LTCG and mitigating depreciation recapture will be greatly appreciated.

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Dan DeppenBusiness Member

Erie, CO · Member since 2017 · 274 posts · 267 votes

I don't know why you are selling, but if it is to step back from property management you can sell them on owner finance. You'd retain cash flow and it would be treated as an installment sale from a tax perspective.

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Clayton Silva
Lender · CA · Member since 2018 · 638 posts · 393 votes
1y
I'd start with a realtor and get some idea on values, and definitely consult with a CPA as well to determine best way to sell. Might be worthwhile to do an installment sale or something like that to reduce taxable gains year over year. Best of luck on this! We do blanket loans on investment properties if they are all 1-4 unit properties so if you do get buyers that want to purchase in bulk we may be able to assist.
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Daniel TanasaBusiness Member
Realtor · Houston, TX · Member since 2019 · 351 posts · 174 votes
1y
Hello Vaughn,
I have a few investor clients that are looking to buy a portfolio of properties depending on size and location. Can you send me details and price? If you haven't figured that out and if you want me to help you calculate the valuation for it I will be happy to do that and send you comps.
Feel free to reach out if I can help.
Good luck!
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Dan DeppenBusiness Member
Erie, CO · Member since 2017 · 274 posts · 267 votes
1y
I don't know why you are selling, but if it is to step back from property management you can sell them on owner finance. You'd retain cash flow and it would be treated as an installment sale from a tax perspective.
2 Reply
- Clayton Silva
  Lender · CA · Member since 2018 · 638 posts · 393 votes
  1y
  Quote from @Dan Deppen:
  
  I don't know why you are selling, but if it is to step back from property management you can sell them on owner finance. You'd retain cash flow and it would be treated as an installment sale from a tax perspective.
  
  100
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Vaughn Ramcharitar
OP
Investor · Cypress, TX · Member since 2016 · 3 posts · 4 votes
1y
Thanks all for the great replies....appreciated..
Would prefer to sell entire portfolio and not singly as the properties held in Tx master series LLC...60 performing properties ~ $17M and considering an institutional buyer
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- Account Closed
  Rental Property Investor · New Braunfels, TX · Member since 2022 · 409 posts · 408 votes
  1y
  Quote from @Vaughn Ramcharitar:
  
  Thanks all for the great replies....appreciated..
  Would prefer to sell entire portfolio and not singly as the properties held in Tx master series LLC...60 performing properties ~ $17M and considering an institutional buyer
  You will get the best price by having them vacant and selling individually but I’m sure you already know that. Nice job on creating such a portfolio.
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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
1y
Quote from @Vaughn Ramcharitar:

Hi all,
We have a fairly large single family rental portfolio that we have built up over many years in the Houston Tx area. I'm considering selling the entire portfolio. Not sure where to start and whom to call. Any advice / guidance on best UPREITs, 721 exchanges, maximizing portfolio selling price, reducing LTCG and mitigating depreciation recapture will be greatly appreciated.
Here’s what I would do: engage a real estate consultant holding the CRE designation to provide advice as to your options and the anticipated time and proceeds of each.
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Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
1y
@Vaughn Ramcharitar
If you're considering selling your Houston SFR portfolio, you're in a great position to explore strategies like a 721 Exchange (UPREIT) to defer capital gains and depreciation recapture, especially if you're looking to transition into passive real estate income. To maximize your portfolio's value, start by engaging with a commercial broker or portfolio specialist familiar with institutional buyers, and consult a real estate CPA to structure the sale tax-efficiently. DM me if you'd like help connecting with vetted professionals or exploring the right UPREIT options for your goals.
Good luck!
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- Jim Berman
  Property Manager · Houston TX · Member since 2025 · 20 posts · 11 votes
  1y
  Quote from @Wale Lawal:
  
  @Vaughn Ramcharitar
  If you're considering selling your Houston SFR portfolio, you're in a great position to explore strategies like a 721 Exchange (UPREIT) to defer capital gains and depreciation recapture, especially if you're looking to transition into passive real estate income. To maximize your portfolio's value, start by engaging with a commercial broker or portfolio specialist familiar with institutional buyers, and consult a real estate CPA to structure the sale tax-efficiently. DM me if you'd like help connecting with vetted professionals or exploring the right UPREIT options for your goals.
  Good luck!
  
  @Vaughn Ramcharitar, it's definitely worth connecting with Networth to see what they can value your portfolio at. I've found them to be very professional with wide investor connections, and probably one of the 2 or 3 brokerages with experience with these kinds of larger transactions. + for them having a heavy local Houston presence. Roofstock would be another option, just more "corporate".
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
@Vaughn Ramcharitar Who is the natural buyer? That hasn't been discussed and is important to the disposition strategy. If this is a portfolio of homes in neighborhoods with low home ownership than selling these homes individually is going to be a monumental task and selling as a portfolio or perhaps in multiple packages will make most sense because an investor is the logical buyer. If these are homes in neighborhoods that always were (or even better for you) transitioned to neighborhoods where home ownership has increased, chances are there's a lot of equity and the best buyer, depending on condition may be to sell to home owners. This requires analysis by local real estate sales people who are experts on the markets where the properties are located. Understanding who the natural buyer is should come before assessing tax strategies.
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Lizette Cordero
Member since 2025 · 3 posts · 0 votes
1y
How many properties are included in the portfolio? Are all the properties in the same area?
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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
1y
@Vaughn Ramcharitar, Congratulations on the incredibly hard work it took to build and hold that portfolio. Now's the time to first ask the "why" question. The answer to this question will inform all of your future potential actions. Why are you selling now?
Our clients who are overwhelmed with too much effort managing a single-family portfolio like this will sell either as a portfolio and buy a larger asset commercial or MF in nature. Or they will sell clusters and buy fewer more expensive rentals - either multi-famiy, commercial or vacation rentals. OR a combination of all the above. They will do this because they can do 1031 exchanges on all as one, or as individuals. And this lets them continue to defer the tax indefinitely. It allows you to continue the depreciation schedules. And will let you further shape your portfolio in the future.
I'm not a fan of the 721 in this situation unless you are absolutely completely pinky swear done with real estate. And you are young enough to not be thinking about death and estate planning. Because a 721 will defer the tax one more time into the upreit. But if you ever sell any of the upreit you will pay all of the tax and depreciation recapture. You've worked too hard to earn those gains to give them back unless you're sure!!
If you're looking that direction because you want passivity then look at syndications that will accept 1031 money. Or DSTs which give you all the current and on-going benefits of real estate ownership. But are totally passive. NNN commercial properties fall one small step closer to active. But can be very attractive in the right circumstance. You only have to manage the least. But using the 1031 still gives you unlimited tax deferral options.
There may be some demographic info about your portfolio that would make it more attractive as a portfolio. But in general, you will get your best price selling as individuals. But you can cluster those sales to accommodate a consolidation 1031 exchange from several smaller into one larger property. And if you're going into DSTs in particular it's easy to cluster and find DSTs available.
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Julio GonzalezPro Member
Specialist · West Palm Beach, FL · Member since 2008 · 4k+ posts · 1k+ votes
1y
As others have mentioned, a 1031 exchange could be another option. Here's a helpful article on the requirements https://www.biggerpockets.com/forums/311/topics/965199-requi...
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