All Forum Posts by: Kimberly T.

 Actually, marital status is not a federally protected class. Most states list it as one, but NC is one of the few states that does not, so discrimination based on marital status is legal there. I only learned that last year when researching NC as a potential state to invest in.

I would recommend the OP do some research on this topic specific to NC, perhaps speak to a landlord tenant attorney.

 I'm not sure what you mean by mortgage states. Can you explain that?

I wonder if the prevalence of using an attorney vs title company varies by region.  I've never even heard of using an attorney when buying property (unless it's some huge complicated purchase), and we've bought properties in CA, AZ, and CO.  We always use title companies.  They research the title of the property and you get title insurance showing that if they screwed up and there's a problem with title that they should have caught, they'll pay for it (well, their insurance will pay for it).

Edit to add: this is something that none of our real estate agents has ever even asked us about when we bought property.  It was always just a given that we'd use a title company (which is typically chosen by the seller).

This is one of many reasons why we don't show units while they are still occupied.  Other reasons include: current tenants claiming their "expensive jewelry" is missing after a showing, prospective tenants seeing how these less-than-clean tenants keep the unit and think this is an acceptable condition to keep the unit in, and having to give notice and arrange showings days ahead of time (since many prospective tenants won't bother showing up or remembering their appt time that far down the road).

We always want prospective tenants to see exactly what they will be getting with the unit, which is why we only show it in rent-ready condition.  This way they see how clean we expect it, and they see that *fresh paint* or *new carpet* in person rather than getting a promise from us that we'll do it (how many tenants have written horror stories of getting promises from prospective landlords of what will be done prior to them moving in, and then having it not get done?).  No thanks.  Show them the unit when it looks great, and it should sell itself.

What about landlords who manage and work on their own rentals?  From what I have read, if a landlord has their rentals in LLCs, but still manages them himself and does work on it himself, then that would be grounds to pierce the veil and go after the landlord personally.  Maybe this was related to "comingling funds" and such, but as I recall, the concept of LLCs for smaller landlords who manage and work on their own properties generally didn't make sense when an umbrella policy will adequately cover their assets.

For the record, my husband and I own our house, a triplex, and 3 fourplexes, and our CPA advised us that a LLC likely wouldn't be worth it for us, and that sufficient insurance coverage would be fine for our situation.

Thanks @Bill Exeter and @Dave Foster for your responses!  Sorry for not being able to respond sooner, between working full time and remodeling our master bath on weekends, I have very little time for BP right now.

We're not necessarily planning on doing the reverse 1031 immediately.  Maybe not for another year or two.  I just wanted to throw this idea out there and see if it was feasible/reasonable to do.  I did think of a couple more questions...

- What is the ballpark cost to do something like my above scenario (buy 2 properties and put them in a EAT, then sell our CA triplex)?  Just looking for an approximate range, are we talking $5k-$10k or $40k-$50k?  Just for the reverse 1031 part, I'm not talking about other costs like realtor fees for buying/selling, title fees, etc.

- Hypothetically, if we were to buy one of the two replacement properties, how long until we'd need to buy the other replacement property to also do the reverse 1031 with it?  Is there some sort of time frame within which we'd have to buy both the replacement properties, or is it fine as long as we buy it and put it in the EAT prior to selling our relinquished property?  Ok, not sure if that made sense... let's say we buy the first replacement property in July, could we buy the second in, say, October, and then sell our relinquished property after that (but still within the 180 days)?  So we just have to get both replacement properties into the EAT prior to selling the relinquished property?

Just looking for some feedback on what we are considering doing here to see if there's something I'm missing.

We currently own our house and a triplex in CA, along with some fourplexes in AZ and CO.  We plan to leave CA in the next 5 or 6 years and probably move to CO, so we're trying to determine the best strategy to offload our properties here.  I did a little research on reverse 1031s, and this is what I'm thinking:

1) Buy some rentals in CO as our reverse 1031 replacement properties; maybe a fourplex plus a house we could live in later on, and have our PM manage them for us as rentals.  We have enough cash that we could put 25% or so down on each without needing to tap into equity of any of our current properties.  These replacement properties would go in the required EAT.

2) Name our CA triplex as our relinquished property, list it, and sell it within the required time frame.

3) Use the proceeds from the triplex to finish off the reverse 1031, and I guess that will reimburse us for the cash we used up front to buy the replacement properties.

4) After a couple years, we'd sell our current home in CA and avoid capital gains tax on that profit, then quit using the house we bought in CO as a rental and move into it.

So, my questions:

A) Does that all sound feasible?  Is there something I'm not considering that could pose a problem (besides the obvious, like not being able to sell our triplex within the 180 days or something)?

B) It looks like there are companies who specialize in handling reverse 1031; which state would be better to find someone in for handling this, CA or CO?  How do you evaluate these companies?

C) Any problems/issues with having the rentals managed while in the EAT?  And then getting it out of the EAT and into our names?

D) We manage our triplex ourselves, so that's why I was thinking it would make sense to put the replacement properties in the EAT instead of the triplex, so we don't have to deal with the whole LLC issue with that; is there something I'm missing here?

E) What kind of problems do lenders typically have with dealing with a reverse 1031?

F) What starts the clock on a reverse 1031 in this scenario?  Is it the purchase of the first replacement property?

Woo, that turned into a long post!  Any feedback appreciated!

We bought a fourplex in Colorado Springs in December and used Benson Insurance Group (an insurance broker) in Colorado Springs.  He found a good company called Pacific Specialty Insurance Company that was pretty reasonable.  I called about 6-8 different brokers and this was the best one I could find.  Hope that helps!

He lost whatever dignity he had as a father when he CHOSE to do/make/deal drugs in his home.  That was his choice, not his landlord's.  The landlord has a responsibility to his/her personal finances, property, and other tenants' safety and quiet enjoyment of the premises, NOT to some drug addict's supposed "dignity."

Yeah, I'm a fan of tough love and holding people accountable for their decisions.  Maybe if everyone was always held accountable for their decisions, people would make better decisions more often.

I have a sit down meeting with tenants before they move in, to go over the rental agreement.  In that agreement, it says very clearly that illegal drugs are not permitted on/in the premises.  Sit down done.

I'm not saying I never give tenants a second chance or work with them toward a mutually beneficial solution.  Minor lease violations and late rent are cases where I'm willing to give them a second chance or work with them (but I let them know I mean business).  However, major crimes are not cases that deserve a second chance, especially when it leaves my property and other tenants vulnerable.

Curious to hear how things have gone this week...