All Forum Posts by: John Brown
John Brown has started 5 posts and replied 30 times.
Quote from @David M.:
Each to their own.. personally I’ve been liquidating my properties to reinvest in more passive, higher yielding investments. Actually have paid very little tax so far, even after 20years!!
Your idea is basically doing a 721 exchange. It requires having and upREIT. Properties are exchanged into the reit, the sell gets unit shares (partnerships don’t technically have shares). Then you sell your units and the tax liability is left behind with the reit, as I understand. Another person posted a nice article/ flyer detailing this transaction.
However I doubt any upREIT would take something this small. But I never tried
I believe your way won’t work because he is capitalizing a partnership, not his own entity. So it’s still a transaction. Or, it’s still a huge gain/profit to him when you pay him out — so tax liability still there
he would be part of the group refinancing the properties so it would be up to the entity, not him to pay the capital; gains wouldnt it?
Quote from @David M.:
@John Brown has he actually ran the numbers? over 5 years, I am GUESSING there hasn't been that much depreciation. How much Passive Activity Loss (PAL) does he have built up? Most people don't look at it, but that will help offset.
Installment sale may be a way to distribute the tax liability. Its not really seller financing. he just gets his money over a period of time, so the funds (a massive amount) would be held in escrow. I haven't done it, so not sure of all the details.
Otherwise, you might just buy from him in stages over time...
Does he have any other capital investments that he can tax loss harvest?
I assume he doesn't want to move into any of the properties for at least a couple of years to use the sec121 exclusion? You'd have to wait, and it better actually if he 1031'ed into a new property and then lived in it...
Otherwise, just another investor who didn't think through his exit strategy and unwilling or unable to pay the tax for his gains...
Good luck.
He wants out of the business completely. he just wants to retire and enjoy the fruits of his labor. Personally I think I would enjoy living off the cash flow and let a PM run the properties but I'm not going to give him ideas. I think you might be hitting the nail on the head with the
"just another investor who didn't think through his exit strategy and unwilling or unable to pay the tax for his gains..."
this is a crazy idea Ive kicked around and tried to figure out if its do-able or even legal. Could he enter into partnership with us forming a whole new company where he contributes the property as equity and then we refinance the property at the price we agree on and we use that money to pay him as a silent partner.
Quote from @Paul Kielczewski:
Found a potential deal. 4 Acres SW of Raleigh about 30 minutes from downtown. Thinking about snagging it and building some tiny homes for traveling nurses and construction workers. Would love to connect if you're in the tiny house game.
If you are considering tiny homes for travelling workers and they will be on foundations, have you considered container homes.
Quote from @Leslie Pappas:
Quote from @John Brown:
Good day all,
i have found a property that is for sale and the owner wants out of it. It is approximately 5 yo and consists of a few duplexes for sale on one side of the block and he owns a few more on the other side, he wants to split the sale up so he doesnt pay so much all in one year in capital gains tax. He has made it clear he will not owner finance. are there other options for to minimize capital gains tax and in order to make this deal more beneficial to all?
https://www.biggerpockets.com/member-blogs/7993/65931-import...
@Leslie Pappas he just wants to sell it and go he doesnt want to reinvest into another property.
Thats what were looking for now is a local investor to partner with and i never give a GC money up front on anything. He gets paid in installments as he hits mile markers in the project.
Good day all,
i have found a property that is for sale and the owner wants out of it. It is approximately 5 yo and consists of a few duplexes for sale on one side of the block and he owns a few more on the other side, he wants to split the sale up so he doesnt pay so much all in one year in capital gains tax. He has made it clear he will not owner finance. are there other options for to minimize capital gains tax and in order to make this deal more beneficial to all?
No @Bob S. that is not what i want to do at all. We want to build the team to make this work including an experienced investor and go from there. in no way shape or form do we want to go into this fully loaded and halfcocked. We want to make sure this is successful from the jump.
@Nicholas L. it does sound like alot but our logic is this simple buy properties with as many tenants as possible so if you lose one or 2 its not a major loss to the over all cash flow. and the house flipping is just for lumps of cash and something to be active in while the multi tenant units properties are cashflowing.
@Nicholas L. Multi-Family, IOS, house flipping and later on property development.
@Stephen Akindona is there an area on here o help find a local mentor/advisor.
Hello All, My partner (business not life) and I have decided to get into CRE. After months of research hours of talking, planning, scheming forming the LLC pulling our hair out etc... We have both independently come to ask ourselves the same thing. Do we really need a mentor? We know all the gurus tell us that we do, right before they pitch us their course or services, but is that just them diversifying their income? With the whole world of information at our fingertips and groups like this is the absolute need for a mentor necessary? Yes having a mentor should prevent some growing pains, but those are the best teachers. So what do y'all think should we push forward and rely on our will, wit and the opinion of our professional team. Or should we bite the bullet and get a mentor that may or may not save us some growing pains?
P.S. Is there any veteran only REI groups? My partner (business not life) are both Marines and we like to deal with our own as much as possible.