All Forum Posts by: Leslie Pappas
Leslie Pappas has started 1 posts and replied 820 times.
Post: Delaware Statutory Trust
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Hi Eric, this is the word in which I work in everyday. I have a blog here on BP and have some posts you may be interested in as you're doing your research.
https://www.biggerpockets.com/...
Post: first time consideration for the 1031 exchange process f
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Originally posted by @Deidre M Lewis:
Good evening, can someone walk through the process for a 1031 exchange and willing to walk me though my first one.
Hi Deidre, I wrote a blog about some important considerations. Completing a 1031 Exchange allows you to defer that tax and depreciation liability and invest in another rental property.
To have a successful 100% tax deferred exchange there are a number of requirements the taxpayer must follow. The seller must trade equal or up in value, invest all equity from the sale and replace the debt, follow specific deadlines, enlist the help of a Qualified Intermediary to provide advice, prepare 1031 Exchange documents, and also hold the funds from the sale. Those are just a few requirements, there are others that are just as important.
Post: Should I Keep or Sell my Rental Property
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Originally posted by @Ben Mosh:
Hello everyone -
I'm hoping to get some general input on what I should do with one of my rental properties (eg, do you think the amount of equity I have would perform better in a different investment). Also, what calculator(s) do you all recommend for analyzing current investment performance (rather then analyzing new investments). Some details on the property:
Location - Condo in Orange County, California
Current Value (based on zillow) - $520K
Current principal on loan - $100K
Monthly Rent - $2,800
Current Monthly Income (before factoring in maintenance and vacancy) - $1150
Might be worth looking into a 1031 Exchange
Post: How to do a 1031 exchange?
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Originally posted by @Tucker Kincaid:
Hello BP!
Starting the process to do a 1031 exchange. Selling in NC and buying in FL.
What are the starting steps? And how to find the right people to hire?
Thanks!
Please check out a blog I wrote about it.
Post: Delaware Statutory Trust DST 1031 Difficulty Giving up control
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Originally posted by @Nick C.:
First experience with a 1031 exchange and DST. Let's see how this goes!
Sold our vacation rental and have put the proceeds into two DST offerings. Both are multi-family apartments and one has a 3.9% distribution rate and the other is 4.01%. Both were offered by Capital Square.
Congrats and best of luck! My clients who are no longer hamstrung by daily upkeep and repairs experience a tremendous sense of relief investing passively.
Post: Multifamily Apartment Syndication
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Some investors just want the tax benefits, passive income, and appreciation without the hassles. Syndicated real estate is the best way I know to enjoy these benefits. The potential to both diversify broadly and own institutional real estate can be very powerful, and many of our investors have done just that.
The advice of an expert who works in the industry every day, knows all the players and their track records, and performs due diligence on each offering is a great benefit. You might consider using an investment advisor to evaluate which offerings are suitable and promising.
Post: Passive investing: Multifamily vs REIT
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Tax Sheltered Income. Since syndication investors own real property they get the benefit of depreciation on the property. Multi-family depreciates on the same 27.5 year schedule as 1-4 unit residential real estate.
This combined with using the whole amount invested plus the loan as the basis for depreciation shelters most if not all income for most investors.
REIT income on the other hand is typically taxed as ordinary income (which for a California investor at the top tax rate could equal as much as 52.9%).
You also wouldn't be able to take advantage of the 1031 Exchange if you invest in a REIT.
Post: What investment method should I use with $130k
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Raul, so sorry to hear about missing out on using the 1031 Exchange.
If you’re looking to take a more passive role in your real estate and want the benefits of diversification there are funds available to accredited investors that are designed to allow investors the opportunity for ownership of institutional investment grade property that is occupied by regional, national, and Fortune 500 credited companies.
Post: I'm New to SF: Seeking Info Interview with Seasoned SF Investor
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Originally posted by @Josh Fader:
Are any experienced SF real estate investors willing to meet with me for coffee to discuss this market? I am in my mid-20's and have been a part of the BP community for a while and am eager to take that first step and invest in my first property. I want to learn the strategies investors are using in this market and meet some of you in this community to start to develop my network here! Please reply to my message I'd love to connect.
Hi Josh,
I live in Silicon Valley, and I specialize in syndicated real estate. I can tell you what people here have done to set themselves up for retirement. There are two types of investors here:
1. Buy or inherit and hold for a long time, then cash out and redeploy equity into potentially higher cash flowing properties or other investments.
2. Buy or inherit and hold all their lives while working the properties for income.
I've seen teachers, firemen, software engineers and all sorts of people utilize both strategies successfully. One way or another, however, the investors must work to pay down loans, increase rents and decrease expenses wherever possible. One way or another, they are building their net worth.
Building net worth is how you may possibly retire with fewer worries. If your retirement utterly depends on having adequate cash flow from your properties, any downturns will cripple you. AND you must maintain adequate reserves to take care of the disasters that may happen.
Most of my clients fall into the first group above. If you are or become an accredited investor, you can buy into institutional grade $50-125M projects with as little as $100,000 and diversify.
So my advice- build your equity.
Best of luck! Leslie
Post: Deprecation Recapture Tax Rate?
- Professional
- San Francisco, CA
- Posts 876
- Votes 301
Originally posted by @Bob Metry:
How do you determine the the tax rate for depreciation recapture? When you recapture the depreciation when you sell a property, is the recapture tax rate based on your ordinary tax rate at that given time? For example, if I have $100k in deprecation to recapture, and my ordinary income tax rate that year is 15%, would I pay $15k in tax? If I my tax rate were 0% would I pay $0? Is there a minimum and/or maximum depreciation recapture tax bracket?
Thank you in advance!
Feel free to take a look at this post I made