All Forum Posts by: Juan Carlos Quiroz Zolezzi

Hedy,

If you are going into a 1031 you must know about 1031s. Its not as simple as they sound and there are strict timeframes that must be followed. Do a search online for 1031s and read about them. Contact some exchangers and they will explain the process. There is a good exchanger in San Diego www.1031exeter.com, there are others.

You need to make sure that the exchange is worth it. If you owe $250k and are selling for $420k, then your profit is not $200k, it is not even $170k, it would be $170k less closing costs which you should calculate at about 10% or $42k. I'm assuming you bought for $250k. So instead of 200k you are now looking at a gain of about $128k. The capital gain tax on that is 15% or $19,200, yes, this is high but is an exchange worth it for this? Moreover, for the exchange to work you would need to buy investment property with where you reinvest the 128k gain and where you can place leverage for $250k (or replace the debt with cash of $250k), you cant just buy property with only the 128k. Otherwise you could get a boot tax.

Consider also that the exchange transaction (exchanger, escrows, title, fees, etc) is going to cost you money, and it wont be insignificant.

If I were in a position similar to yours, I would not sell your LA property, that seems to be a good property, being in LA it should produce money for the long term. I would refinance and pull out as much money as I could with a 30 yr loan at a 5% rate or better. Yes, your LA property would not cash flow as good but then you will have some extra cash; I would turn around and use that extra cash to invest. If you make a good investment the combined return from your current property and the new investment should be higher than what you have.

Alex,

I find most RE investors that have entities hold property in LLCs as this provides the most flexibility at the lowest cost.

Corporations and LLCs have almost the same "formality" requirements, so don't think that because you have an LLC you don't have to follow the formalities. The flexibility refers to the structure of the LLC not to getting away with things. The lowest cost of the LLC refers to tax matters and double taxation.

If you work in 2 states you will either have entities in each state or will need to be registered in the 2 states, which is almost the same amount and it is the cost of doing business.

Many RE investors, hold their properties in trust and they argue that this protects their assets. A trust does not limit liability but it does provide anonymity, which may be just as important. There are costs for maintaining the trusts and there are formalities to be followed.

Having General Liability insurance also protects your assets as in the case of a lawsuit you may be defended at the cost of the insurance company and they may also pay all or a big portion if you lose. However, not all policies are created equal, just because you have insurance does not mean you have General Liability insurance. You may only have insurance against a fire loss without GL coverage. You may also have GL without dog coverage and then you get sued because of a dog bite.

HOWEVER, as @Jay Hinrichs mentioned, you may spend all this money and nothing ever happen... which is the norm. Don't let any of these stop you from investing and growing.

On our side we use LLC and GL to protect our properties.

Hi Conor,

Welcome to BP, this is a great website and resource for all types of real estate investing.

I always recommend these 3 things to people beginning in Real Estate Investing:

1) Do a lot of research here

2) Do not spend a lot of money with coaches, it would be much better to put that money to work and learn from experience, I'm not against coaches or education, but you need to be careful as there are some that are really bad

3) There are many real estate clubs out there, visit them, select your favorites and meet other investors working your area. You can find info on clubs here and also you can look at meetup.com. Networking is key to success.

As for your question regarding how to find investors, I assume you are asking for capital investors who will invest money with you. My biggest suggestion is to talk to everyone you meet about what you do and you will being finding investors, start with the obvious, family and friends. However, do realize that if you are getting someone to invest with you (not a loan, invest), then you are dealing with securities and there are a lot of laws for that.

Cheers! see you around...

Hi Adam,

I really like the suggestion from @Dale Shin, send the tenant a friendly letter, trying to amicably find a solution to the missed rent increases, word the letter in such a way that you are not forcing this on them. Wait to see how they react and then you will have more information for your next move.

You may want to check about rent control, although I have only seen these on residential property.

I would not get an attorney involved that would just complicate things, and yes you can check with an attorney about this, but then you get into a cost-benefit scenario.

Hi Douglas,

Thanks for your service!

Thanks for the candid intro, your story reminds me of the Doctor in the cash flow game, most people don't like the Doctor but if you play it right and with some adjustments it is easy to win the game...

Welcome to BP, this is a great website and resource for all types of real estate investing.

I always recommend these 3 things to people beginning in Real Estate Investing:

1) Do a lot of research here

2) Do not spend a lot of money with coaches, it would be much better to put that money to work and learn from experience, I'm not against coaches or education, but you need to be careful as there are some that are really bad.

Here is a seminar that I really liked, unfortunately the next one is in Atlanta and the one after that in Santa Ana CA but in September.

http://garyjohnston.com/seminars/financial-freedom...

3) There are many real estate clubs out there, visit them, select your favorites and meet other investors working your area. You can find info on clubs here and also you can look at meetup.com. Networking is key to success.

Cheers! see you around...

Hi Nicole,

Welcome to BP, this is a great website and resource for all types of real estate investing.

I always recommend these 3 things to people beginning in Real Estate Investing:

1) Do a lot of research here

2) Do not spend a lot of money with coaches, it would be much better to put that money to work and learn from experience, I'm not against coaches or education, but you need to be careful as there are some that are really bad

3) There are many real estate clubs out there, visit them, select your favorites and meet other investors working your area. You can find info on clubs here and also you can look at meetup.com. Networking is key to success.

Cheers! see you around...

Hi Pete,

Welcome to BP, this is a great website and resource for all types of real estate investing.

Congrats on graduating from college!

I always recommend these 3 things to people beginning in Real Estate Investing:

1) Do a lot of research here

2) Do not spend a lot of money with coaches, it would be much better to put that money to work and learn from experience, I'm not against coaches or education, but you need to be careful as there are some that are really bad

3) There are many real estate clubs out there, visit them, select your favorites and meet other investors working your area. You can find info on clubs here and also you can look at meetup.com. Networking is key to success.

Cheers! see you around...

Hi Jeff,

Welcome to BP, this is a great website and resource for all types of real estate investing.

I always recommend these 3 things to people beginning in Real Estate Investing:

1) Do a lot of research here

2) Do not spend a lot of money with coaches, it would be much better to put that money to work and learn from experience, I'm not against coaches or education, but you need to be careful as there are some that are really bad

3) There are many real estate clubs out there, visit them, select your favorites and meet other investors working your area. You can find info on clubs here and also you can look at meetup.com. Networking is key to success.

Cheers! see you around...

Hi Michael,

Welcome to BP, this is a great website and resource for all types of real estate investing.

I always recommend these 3 things to people beginning in Real Estate Investing:

1) Do a lot of research here

2) Do not spend a lot of money with coaches, it would be much better to put that money to work and learn from experience, I'm not against coaches or education, but you need to be careful as there are some that are really bad

3) There are many real estate clubs out there, visit them, select your favorites and meet other investors working your area. You can find info on clubs here and also you can look at meetup.com. Networking is key to success.

Cheers! see you around...

Hi Brian,

Welcome to BP, this is a great website and resource for all types of real estate investing.

I always recommend these 3 things to people beginning in Real Estate Investing:

1) Do a lot of research here

2) Do not spend a lot of money with coaches, it would be much better to put that money to work and learn from experience, I'm not against coaches or education, but you need to be careful as there are some that are really bad

3) There are many real estate clubs out there, visit them, select your favorites and meet other investors working your area. You can find info on clubs here and also you can look at meetup.com. Networking is key to success.

Cheers! see you around...