All Forum Posts by: Bill B.

 Allstate has the same 5 property limit, I have 10 with them. There are two work around I’ve discovered so far… 

When I switched 5 at once my agent wrote a “business case letter” to the main office about why they should take my business and that worked. 

Since then I’ve added two more. One in state and one out of state. What the agent did was add the new property as a primary residence. As such, it’s instantly accepted. Then the next day they switched it to a rental. No issues in the years I’ve owned them since then. That would be harder with several at once, but incase you need to add one more. Otherwise try the business case letter. 

Farm it out to assisted living gurus/operators?  I think you’d lose value if you converted it to 1/2 as many rooms unless MAYBE you could attract MTR. It’s going to be based on income so if you cut rooms in half and rents only clime 50% you’d going to lose 25% of your value. I really like the assisted living/rehab center idea, you could double the value. 

Condo? Maybe they owe $50-$100k in HOA fees. After checking for their lien I'd want a statement from the HOA. I guess half off is 1/2 if they're confident they can take possession.

Ps. 1) How does this slip through lien holder for 15 years. 2) assuming they borrowed 75% 15 years ago that's $100k. It's only gone up 50% in 15 years? 2-3% per year isn't super exciting. I wonder if it's like some of the ski condos in Utah where the HOA fees are so high they really put a damper on appreciation.

Thanks for the interesting topic nonetheless Chris. You have the most interesting experiences. 

It’s an investment. So you’re ok that the land isn’t producing rent. 

But…you have to spend all your net proceeds. So the land has to cost as much as your sales, not the land plus the building costs, because you won’t get that don’t within the deadlines…

Then…you can’t build to sell. That’s a job, building homes to sell, not an investment. So you’d have to build the duplexes and then rent them out. Yes, you could “eventually” sell them. But then the 1031 didn’t do you much good because you’d owe taxes on both sales when you sold unless you did another 1031. The taxes don’t go away when you do a 1031, they get rolled in to your next deal.  

Reach out to @Dave Foster for an expert’s opinion. 

21-24 month lease, so it ends in spring, not winter:

“Assuming ZERO late payments or lease violations the rent will be reduced $100 (or 5%, whichever is lower.) for the last 6 months of the lease.”

That’s a 1% discount for a “good tenant” I assume you would accept 1% less for zero late payments and violations. 

You’d have $30k tied up to make $2,400/yr almost 8% even if the land never appreciates. And then you triple your money eventually. As long as there was an agreement that rent would go up enough to cover insurance and property tax increases I think I would be ok with this. Again, assuming they are responsible for all repairs/maintenance. You don’t want to be on the hook for a $10k roof or HVAC, or BOTH. Get a real lease saying all this. 

Ps. Have a plan incase he outlives you. 

Pps. You could reach out to @Jay Hinrichs. I’m pretty sure he talked about doing a deal like this in the past. 

If you can’t make a go of it Chris I don’t see anyone else having any luck. 

Could you offer the current note holder $1 plus 1/2 the sales proceeds if you’re able to take ownership? It seems like the current note holder has obviously given up and anything should be better than nothing. That way you’re risk free. 

Maybe they wouldn’t go for that but maybe you could offer 70% if you’ve only got $1 in to it. 

To the best of my knowledge, and with TurboTax’s backup…

The taxability as short-term or long-term gain is based on the purchase and sales dates of the property not when you receive the proceeds.  
  . 
I’d really try to wait until a year has passed, the savings could be huge. Depending on the taxable gain you’re talking about. Rent it to them for the time difference and give them an option to purchase at the agreed upon price amount minus a portion of the rent?

You sure got lucky he took a credit card. That SHOULD be a win for you. I use a credit card whenever I possible. 

What’s the restriction for?

if I was a lawyer I would argue it says at the end of the 25 year period it would be extended for “A” successive period of 10 years. 
 
I read that as going out of its way to say. Specifically ONE extension after the specific 25 year period. It doesn’t say anything about the end of the 10 year period. 
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ps. I wonder why they didn’t just do a 35 year period. Either that wasn’t legal or there was a way to void it between the 25 and 10 year periods?