All Forum Posts by: Ben Moore

Quote from @Travis Hill:

@Ben Moore awesome to see you getting advice, research, and courses of action before pulling the trigger. Any transaction involves taxes, risk, and income. You mentioned you are risk adverse. Since that is a subjective term what that means for you is different for me. You almost defined your buy box. What does your market tell you about what $400k will buy. STR could be had via arbitrage (sharing income but less managing, strong relationship, communication, and trust). From my understanding all the money goes into the new property, any money left out will get taxed. So your capital/unit is all of it. I am excited to see what you choose.

Thanks.. I am in a fortunate position for sure.   STR's are a consideration provided I could find (a) the right property and (b) the right STR managment company.     Will keep all updated on my journey.. should be a interesting one for all.. 

Ben

Quote from @Mike D'Arrigo:

@Ben Moore Since you have a fair amount of capital deploy, you'd obviously need to buy several SFR's assuming you're financing. That could be a challenge given the shortage of invenntory in most markets. You may want to consider small to medium sized apartments. Have you identified a market yet?

 Thanks for your reply.  I have not identified.    Still trying to do the complete calculation and what the right strategy is for my risk / expected reward profile!

Hi Colin, 

 I recently (about 1 month ago) been preapproved  for personal loan at 6.875%    - Fixed 30Years. 

I had not considered the commercial loan route, and indeed would love to understand more around application requirements, differences between the personal loan vs. commerical etc.    

Thanks for any insights.. 

Ben

Quote from @Colin Kelly-Rand:

@Ben Moore

I am in the same boat in the Greater Boston area. Unfortunately (or fortunately) the prices in the Boston market do not yet reflect the higher interest rates. I have been looking recently in Providence and other markets (Framingham, Everett, Lynn) etc that I may find higher cap rate transactions and greater number of units (5+). 

I am predicting I will have 400-600k in equity after the 1031x. Ideally I can purchase a $2M property at a 7 cap. Also, not sure if you know 1031's well, I believe you can hold some of the 1031 funds in escrow for repairs that must be completed within 180 days of purchase. For example if you buy a property that needs work you can reserve some capital post purchase, spend on repairs increasing the value and then hopefully refinance afterwards. Easier said than done, however its nice to have options when their are so few pickings. 

Also, I am a commercial debt broker - so if you are curious what local banks are offering for commercial rates etc send me a DM. 

Cheers, 
Colin

Hi Colin, 

Thanks.  I was not aware of the escrow with repairs but was aware of the 180 day rule in general.  Well the 45 day to identify and 180 day to close rule.   I would have considered a rehab project but now looking more on the turn key solution.   Primarily from a time perspective (less from the value side).  

I am very interested in discussing the commercial debt side.  Its an area I  am not that familar with and any guidance would be great.  I will DM you.

Happy St. Patricks.

Ben

Quote from @Todd Goedeke:

@Ben Moore From an ROI or ConC perspective,Mid term rentals will perform better than long term rentals. Short term rentals should perform better than mid term and long term rentals.

Consider exchanging into 2 duplexes,4-5 beds,4 baths in each unit costing around $550k for each duplex.( $200k down on each) If used for STVR, in the right southern coastal location or outskirts of Nashville, you should be able to earn at least 20% ROI,ConC return.

If you don t want to co manage with a property manager but would like a consistent , fixed return, triple net lease your duplexes to a property manager. A good property manager will locate properties they are willing to triple net lease from you paying you 10% x purchase cost. $550k x 10%= 55k - $25k mort. Expense( 6% x $350k) = $30k = 15% ROI,ConC return. Your only financial risk is that the Property Manager runs the STVR efficiently with good marketing to pay you your lease payments of $4580/ month for each duplex.

 Hi Todd, 

Very intestesting, I was not aware of the triple net lease.  Something I will look into.   As I mentioned, I am keen to stay in the New England area but you have given me something to consider and happy that I am heading the right direction.  The big jump will be when I have a firm plan and location that I want to source the new property(s) and to put the existing unit on the market.   

As a side note, it was interesting, just writing the initial post helped me clarify (in part) the direction I want to go in.   The next big effort is getting off my rear end and executing !

Thanks again

Ben

Quote from @Alex Olson:

@Ben Moore You outline exactly reasons why you should complete a 1031 exchange and you are doing the right thing researching. I am not sure what area you area really considering but if you look at a market like KC you can buy up to about $1.6mm in mulitfamily. You can get from 10-30 units for this price depending on location. There is a class C property that has been rehabbed that is being listed and is about $1.8mm. This is just an example. There are good pms here as well as local lenders that can help you close out these types of deals. Just DM me if you want to talk further. 

 Hi Alex,   

Thanks for the confirmation on the direction and strategy.   My focus is really on the Boston, Greater Boston or indeed New England in general.   I just feel more comfortable being at least within driving distance.    If I do expand,  I will reach out..

Many Thanks

Ben

I am looking into doing a 1031 exchange on a property I have in the norfolk/plainville/wrentham area of MA.     

I have got pre-approval on loan and have spoken to a qualified intermediatory and all is in order.  

My questions are around - with appoximately 400K in equity what should I be looking to do, given I am somewhat risk adverse. 

The reason for doing the exchange is:

(a) Property is getting old and I am tired of managing.

(b) The depreciation benefit is low compared to income I get.  So would like to increase depreciation base. 

(b) Like many, I have great long term tenants and never properly increased the rent.  I could do, but at this stage, reason (a) is the primary reason for doing the exchange. 

I am looking for one or two units that are:

(a) Within an area where there are good property management companies.  Not many options out where the unit is. 

(b) provides a positive cash flow and ROI on the sunken capital ($400K)

The questions I have.. 

1.  How many units should I look at doing ?

2.  Is Short Term rental a better option than long term 

3.  How best to calculate how much capital to put into each unit. 

I guess, I am really looking for someone in this area, that could help discuss / guide (I am willing to pay).   I do have some additional complexites (all good) that I don't want to list here, but they do have a positive impact on my real estate "empire" of one unit :)  

Thanks in advance.

Get a mentor

Hi Adam,  if you are comfortable going with an on-line 'in the cloud' strategy I have used yodlee for years.. pulls in everything you want it to and for property value you can put it in yourself or they can pull it in from online resources..   Another option I believe is Mint - but I have no experience with it. 

@kevin  Thanks for taking the time to respond.  So when you say no tax issues is that just on the revenue or on the revenue and any potential capital gain with moving the property into the llc regardless whether the llc is in a revocable trust or not.   Thanks again

Ben