All Forum Posts by: Matthew McNeil

Yeah, weird.  But banks update policies all the time.  The questions are; do you love this lender so much that you are willing to file a complaint, go to court (potentially), have your credit hit, etc... or is it better just to refi out into another lender?  I've refi'd out several times due to policy changes but I've also adapted...  Got to weigh your options and determine how valuable your time and effort is to you.

Nick Belsky

@Chilly Nathan I'm a little late to the conversation, but it's hard to go wrong in Columbus, Oh...on a grand scale, everything in this city is sitting at 50% of future value...15 years pass and our $250k duplexes are $500-600k duplexes...just for holding them...it happened in Austin...Denver...around D.C...Columbus will bypass Chicago as the most populous city in the Midwest in 30-years...there is exponential room for growth right now.

That said, I firmly believe you can make money in markets like Orlando and Raleigh-Durham...not really a fan of Atlanta or any city inside of Alabama, but Kansas City has opportunity, along with Boise if you can still get in...it's the next Bend Oregon...I think the best idea is to have a personal connection to the market you end up in...a place you know people or would like to visit...or even live some day.

Always happy to chat more about the local market.

Best of luck

@Matthew McNeil and @Jay Hinrichs, If you do a full 1031 (purchase at least as much as you sell and use all of the cash in your purchases) you indefinitely defer all gain and depreciation recapture.  The way to think about a 1031 is that your basis transfers over from the old property to the new property so whatever is above your basis in profit or depreciation after a sale is deferred.  And this creates the opportunities I'm seeing most right now with our investors

1. Selling from high expense and cap ex to newer construction with lower cap ex potential.

2. Selling a highly depreciated asset and buying much larger assets to gain depreciable basis.

3.  Doing either 1 or 2 in order to drop the interest rate on financing.

I think these are opportunities that a lot of folks over look.  They get fixated on the cap rate return on an asset so don't think there's good deals out there.  But a 1031 straight across that costs you 10% less in expenses, adds 10% in depreciation write off, and drops 10% off on financing can really sweeten a deal.  It's finding the little things to sweeten a deal that make it work in a competitive market.

I believe the reason you do the exchange is so you DONT have to recapture and pay that back.  If you sell outright 

I am thinking its long term Cap gain and you pay recapture. 

Your the first to mention recapture that is the real issue at the end of the day selling now for lower cap gain tax can see that but the recapture for those with long term holdings can be the real killer .. which forces you to stay on the rental real estate Hamster wheel.

But maybe some folks could 1031 into a building and the ON Going business if they want to create cash flow and try something a little different.

 

@Matthew McNeil

That’s definitely true. A recent listing of mine went $90k over asking and had over 20 offers and none of them were all cash. One of the biggest advantages to financed buyers is the willingness and ability to pay a large appraisal gap in the event the appraisal comes in low. Low appraisals are not uncommon right now as appraisers are limited to only using sold comps which, in a fast paced market, is lagging data.

Boise seems to keep popping up everywhere I read.   Curious what others thoughts are and what I may be missing?!

@Matthew McNeil Boise is off the charts right now for growth for sure!