All Forum Posts by: Alex Olson

@Mike Douglas I am being a bit provocative here but cap rate doesn't' really matter when you are 1031 exchanging. No you don't want to lose money each month but there is a reason why you are exchanging. Usually to buy a better property(likely worse cap rate) or more units (leveraging all of your equity you have gained). The main thing you should be looking at is cash flow before and after 1031 exchange and time usage. If you want to spend more time doing something else, it is totally acceptable to have a lower cap rate. Most people I know are selling a smaller property and then exchanging in to a larger property (going from SFH to a 4-10 units). Hope that helps!

@Brendan H. Name on title is what matters. Debt has to be replaced and purchase price met. You have 45 days of closing of down leg to identify and then 6 months from down leg closing to close at least one property at equal or greater debt and value. 

At the end of the day, for your 1031 exchange, it sounds like you want control and a great deal. The way you evaluate it is based on future cash flow. Typical cheaper properties dont break even in year 1 or 2, but the tax write off and tax deferral make them worth it. Look at projected cap rate on deals that need rents raised and upgrades. Find something with light value, get a rehab loan from local bank, and defer your taxes. Hint, if you don't love it you can sell in a year again to exchange. Double hint, you can refinance the property you buy to pull out cash. 

 Were you able to place funds with a qi before closing?

What do you mean you have a lack of time for a 1031 exchange? I have examples of people coming to me day of the ID deadline. We got them 3 properties to identify to help them avoid capital gains taxes. We can talk further. 

Great work. You live in a great area for multifamily as well. Keep going!

 There is great documentation on the Kansas City Market. There are articles here on Bigger Pockets that I put together as well as you tube channels. We are considered a good 1031 exchange market. https://www.biggerpockets.com/blog/why-you-may-want-to-choose-kansas-city-for-your-1031-exchange#:~:text=Investors%20use%20this%20strategy%20to,defer%20all%20capital%20gains%20taxes.

@Chris Lopez Great episode. Yes, using a 1031 exchange is a great leverage tool to expand real estate holdings quickly. 

 You should be able to get 10+ unit with $300k in KC with the right property type and location in C or better areas in KC. 

A 1031 exchange allows for the maximum upgrade. You can take all of your gains and prior equity in the property and leverage 75-80%. Typically going from 4 units to 10-15. I can show you how.