All Forum Posts by: Chris Mills

Hi @Unai La Salle,

I double checked with some phone calls this morning and they confirmed it is possible, though very complicated. The DST is simply a "wrapper", for your investment vehicles. This raises a number of questions in my mind though. DSTs are probably the most expensive and cumbersome way I know of to accomplish your 1031 Exchange when it's you setting up your own (versus investing in a pre-existing one). There's a lot of rules the DST has to follow, which is part of how it gets its blessing from the IRS. Typically, a firm will set up a DST when they intend to have hundreds of 1031 and cash investors funding the deal.

I'm assuming you're looking into a new structure because you're bringing in others on your deal? If you only have a handful of investors for your next deal, a TIC would be a far simpler and more cost effective way to go. The main drawback to that would be that all of you would have to be like minded, because you all have to agree on every little decision.

I may be able to be a bit more helpful if you would like to chat offline a bit more. It would help to know the full picture and what your intentions are, and the circumstances that led you believe you needed a specialized entity. Otherwise, I hope I was able to shed some light on the issue here. Best of luck.

@Matthew Johnson Just one month's rent.

@Johnny Lau You have options. Please don't let the ticking clock push you into an investment you'll regret. I help people through this all the time. It's not as bad as you think.

You can PM me if you'd like to discuss more, but there are markets out there where good deals are not a needle in a haystack. And @Amit M. is correct, keeping DSTs in your back pocket (if you're accredited) is a great idea. It's a far simpler and faster process than buying yourself, though you're not going to get astronomic returns due to the buttoned up, passive nature of the investment. That's the trade you make.

Hi @Matthew Johnson,

These are valid concerns. Most of your remedies will fall under some combination of insurance, reserves, and security deposits. I don't know of any program specific to Section 8. I don't have any Section 8 in VA though. In the past, I've made so much monthly off my Section 8 that I would have still made out well even if they trashed the place. I was still pretty strict in screening, so to date none of my turnovers have been that bad. Factor in these additional risk/cost factors when you run your numbers and purchase the property and you'll be fine.

Following this. The good ones are always busy and I could use more.

@David Krulac I've been fortunate to only pay $2,500-$3,500, but I know folks who have paid $8k-$10k per door. The latter is more the case when the public finds out that a developer is buying the building to do a condo conversion or something. 

I agree with the cash for keys idea. In DC landlord tenant laws are crazy. It used to be you couldn't get rid of squatters because you could only evict by enforcing a lease. That's gone, but we still have TOPA (tenant's opportunity to purchase act). Because of all that, I almost always do cash for keys. Unfortunately, in DC it's more than just $1,000, but it's much simpler, and much, much faster than the legal processes.

@James Carlson That challenge sounds awesome!

@Candice De You're in good shape. The deals are out there.

Hi @Chris Taylor,

The IRS looks at "intent". They look at it case by case. If you make it clear that you are exchanging rental for rental, you'll be fine. That said, a year is on the quick side. It makes it look planned. I'd recommend at least two to be safe, in line with what you're discovering. I don't think going under that is wise.

Hi @Devin Miles,

Respectfully, if you don't have the financing lined up, you don't really know if you have a good deal or not yet. Financing costs and/or terms could kill your deal. It happens all the time. Once you know that, you can look at market rents and see what kind of cashflow you'll be looking at if you hold. If you flip it, what will repairs cost? Do you know why it's selling so far below market? Also, if you need to go hard money or conventional investment loan, you'll need a lot more skin in the game than 3.5%. You'll also want to think about how far away this is from your current home if you're going to manage a flip from out of town. There's a lot more, but these are good places to start.

Do you have anyone local, near you who is experienced and can guide you through or partner with you on your first deal?