All Forum Posts by: Christopher Smith

Spend a little time understanding the basics of 1031 exchanges.

So what does the original lease say if no new lease has been signed by lease end? Are they now on a month to month term, if not what? 

I found one of those certifications in a box of Cracker Jacks.

It's a matter of intent.

@Brian Garrett

Don't fret as Buffett says what separates the really great investors from the rest is their ability to say NO 95% of the time when the heard is all saying yes I like many in this thread.

I've learned the art of patience and it's paid off well. I made heavy moves at the end of this March buying all the highest quality tech names in the initial COVID price massacre. They have all doubled already (some much more) and because they have very durable business models they will continue to excel in good times and bad indefinitely.

I didn't neglect real estate either as I loaded up on price crushed REITs at the same time in my IRAs. Many were down well over 50% and most have recovered all of that drop. By having them in a tax deferred account the large dividend distribution amounts can be dripped which is a great way to build very large balances in well managed REITs like STOR and MPW.

I haven't made any major direct RE investments recently either for the reasons you note. Last one I made was all the way back in 2016, and most of my major holdings I acquired in 2010 to 2013 when it was shooting fish in a barrel time. But the stock market has offered up such great deals (the panic sell off at the very end of 2018 and March 2020) I haven't had to do much in the RE area except for the REITs I already mentioned.

In any event, if you truly do find some great RE deals in this ridiculously over priced market let me know I have significant cash available. Based upon your comments I'll trust that you will not be taken in by an impulsive need to throw money at just anything other than a sound investment.

Good luck.

All that overhead for a rental in Ohio?

I've had many rentals in CA and Ohio for over 20 years, solid liability insurance for the properties and umbrella insurance for outside risk (if/as necessary) has been way more than adequate and worlds less administratively burdensome (plus you don't pay the annual $800 fee for each LLC you own that carries on business in or out of CA as almost all do under the incredibly wide scope of CAs franchise law).

Sounds like they are selling you a real Rube Goldberg special, one that's likely unnecessary for basic small landlord activities. Such a structure is one heck of an administrative burden for what are risks that can be much more easily and economically addressed by insurance. 

Have they been regaling you with lots of over the top liability horror stories? As noted I've done this for over 20 years and know many others who have also been doing this for decades. Have yet to meet one conscientious landlord that's ever been sued for anything other than a relatively rare security deposit challenge where the dollars amounts are at most a nuisance issue.

How are all the parties treating the investment in the property for tax purposes currently?

Most of us have a W-2 or some source of Self Employment Income

Guaranteed payment?

Why would you want to pay cash? Contractor request? Quid pro quo? Optics aren't the greatest.