All Forum Posts by: Cason Acor

As I understand it, no, you cannot 1031 those proceeds to build an ADU on your primary residence. 1031 exchange money has to go towards NEW, real property. And the funds cannot be used for anything that is considered to be, or is actually part of, your primary residence. Even if they're separate buildings on the same parcel.

I’m currently a commercial agent for Marcus and Millichap. I absolutely love it and the platform that they have. You’re going to make a lot of cold calls to generate business for yourself. But if you’re up for the challenge, it will be incredibly rewarding. Let me know if there is anything else you want to know. 

I would add that the Utah Division of Real Estate now consideres wholesaling a licensed activity, so you’ll need to get a real estate license. There are ways to get around it, but they’re kind of complex and I wouldn’t recommend doing it unless you had an experienced partner or mentor helping you. 

@Matthew John let me know if you want help running better comps or getting to a good offer price. I’m a commercial agent based out of Salt Lake City, but I do work all over the country. 

@Matthew John I think connecting with a good commercial broker will be your biggest help. For your comps, you’ll want to look at what similar building sold for on a price per square foot basis since there will be no income. A commercial broker should have that information readily available. Ultimately I think it will just come down to you making an offer you feel to be reasonable given the condition of the property.

For estimating expenses, are the empty spaces similar in size and layout to the salon? If so, simply multiply the salon’s expenses by 3. You could also estimate expenses as a percentage of gross potential revenue, but that would require you to know what types of business will be occupying your vacant spaces. Different businesses require different expenses. 

You must sell the property to do a 1031 exchange. I also don’t see how a 1031 exchange would benefit you in your scenario, because you don’t pay capital gains tax when you refinance a property. 

@Dave Foster gave a great explanation. In the simplest terms, the entity, whether a person or corporation, that sold the old property has to be the same entity that buys the new property. I would do what Dave recommends and purchase the new property in your own names and quit claim it to your LLC. Much easier that way.

Is your plan to buy individual units, or entire mobile home parks?

Hey @Clifford Gray. I’m actually an industrial real estate broker. My home base is Salt Lake City, but I work all over the country. I’d be happy to help in anyway that I can. Feel free to shoot me a message with more specifics about the properties you want to find, and I can jump right on it and answer any other questions you might have. 

@Rafael W. I agree with what’s been said above. Where the building doesn’t have a current income stream, a commercial broker will come in handy because they can help you determine replacement costs, sales and rent comps, cap rates, etc to properly determine the value of the building. You also want to consider why the building has been vacant for so long. Especially where this sounds like your first industrial deal, I would highly recommend working with a commercial broker. 

Full disclosure, I’m a commercial real estate agent and I work solely with industrial buildings all over the country. Shoot me a direct message and I’d be happy to answer anymore questions or help you underwrite the building to get a fair price. I know a lot of people on BiggerPockets are fans of working off market and avoiding agents, but a good agent will go to battle for you and give you a big advantage in negotiations, especially if you don’t have industrial investment experience. You don’t want these sellers to take advantage of you. Like I said, shoot me a message and I’d be happy to help and answer questions.