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All Forum Posts by: Michael Wagner
Michael Wagner has started 37 posts and replied 805 times.
Post: Research Resources and Self Storage
- Specialist
- Victor, NY
- Posts 823
- Votes 844
Hello and welcome!
You just posted this message in one of the best online resources available....BiggerPockets.com. Spend some time searching the forums, listening to podcasts and gleaming information from the experts on here. The keyword alert feature is nice for getting information/discussions about specific topics sent to your account for your review.
I have a little blog on here called All Things Self Storage that you might want to take a quick look at. It is pretty basic and you may find much of it to be similar to what you learned at Scott Meyers seminar as I used his courses to get started in SS as well.
I think you will find folks on here are very willing to share what they know but your response rate will always be better if you can present as specific a questions as possible.
All the Best,
Mike
Post: Leveraging...Right in All Circumstances?
- Specialist
- Victor, NY
- Posts 823
- Votes 844
He is DEAD WRONG to say that maximizing leverage is the best option is all circumstances. The only absolute that I am comfortable agreeing to here is that The best option ALWAYS depends on the circumstance and there are MANY circumstances where deleveraging makes sense. His perspective is different than yours and thats okay but he needs to recognize that he is speaking about investing with HIS goals in mind and forcing those upon you by asserting this absolution. Your goals, being different than his, very well may call for buying outright. Leverage is a great tool for producing rapid growth and expansion but it has its drawbacks too. For example, leverage might allow someone to own 20 Million Dollars in real estate with 4 million of that being equity and the rest debt. Alternatively, that same person could own 4 Million dollars FREE AND CLEAR. Cash Flow could very well be equal in both accounts and the 4 Million dollar guy only deals with 4 Million dollars in headaches where as the other guy has 20 Million dollars in headaches. If said investor is satisfied with the cash flow and isnt interested in dealing with the 20 Million dollar portfolio, his best bet is using no leverage!
Post: can you recommend your property manager?
- Specialist
- Victor, NY
- Posts 823
- Votes 844
Tamburrino Properties is awesome but are specific to the Rochester NY Market.
Post: Best way to locate Self-Storage deals
- Specialist
- Victor, NY
- Posts 823
- Votes 844
Originally posted by @Jon Q.:
Originally posted by @Michael Wagner:
Originally posted by @Jon Q.:
Originally posted by @Michael Wagner:
Originally posted by @Jon Q.:
Originally posted by @Christopher Brown:
I teach in the English department at Wake. Enjoying our first snow here in NC!
- I'm not paying a buyer's broker fee - my understanding is that for most SS deals under a certain amount, say mid-six figures, the seller's broker is going to split their fee.
- I've found the local lenders to be between 500 and 750 basis points underneath the institutional lenders so far. The rates have obviously moved a lot over the last eight weeks, so who knows where we'll end up.
- Basically any real property held for business or investment purposes counts as like-kind for 1031 purposes, and while it can get complicated at the margins, real estate for real estate is almost always considered like-kind.
- I think in SS "value" is in a lot of ways in the eye of the beholder. If the seller and I both know that I can turn a $2m property into a $2.5m property in two years with better management, what's it worth right now? That was how most of the conversations we had with sellers brokers went. Particularly with lease-up deals on new development, where we couldn't get anybody to move off their Year 3 stabilized projections. And so we passed on all of those. We finally found what we think are a couple of under-managed (read, non-professionally managed) properties in tertiary markets that have upside: under-occupied, no tenant insurance, no UHaul, no web presence, etc. So while demographics and competition are obviously the threshold considerations, as @Michael Wagner suggests, the management/expansion upside is where the deals are. I'd also suggest to you that because an increasing amount of SS customers come from the web, don't overvalue the vehicle counts. Obviously location and visibility matter, but they don't seem to be the final determinants in the way they were once understood to be.
- And 100,000+ population counts are 5-6 CAP markets in SS these days and those properties are priced accordingly. The institutional money gobbles those properties up - SS REITs are huge players in the A markets. SS is still interesting in that there are so many mom and pop players, but that's less and less the case in the big markets.
- I'd love to stay in touch about the deals I'm working on now; I'll shoot you a direct message and we can talk more.
Good luck!
Chris,
Here's some info I wanted to share as I think others on here will benefit from the info.
This is the checklist I use for SS deals...
| 1. 100 units and up. |
| 2. $50,000 median household income. |
| 3. 50,000 population within 3 miles of the facility. |
| 4. Traffic count past facility of 25,000+ cars per day. |
| 5. Not greater than 6 square feet of storage space per person in the market. |
| 6. Rental rates of around $1 per square foot on existing storage. |
| 7. Buy in distress, if you can. |
| 8. High barrier to entry. |
Here are the reason's for each item on the checklist:
1. There are some major fixed costs in a self-storage facility, the largest of which is the manager. You have to have enough units to support the necessary staff to run the complex. You cannot run a self-storage facility from a kiosk, contrary to what some folks may suggest. And you cannot run it without any form of management. That’s why small complexes in rural markets are always on the market for sale.
2. To pay for storage — $100 per month or more — the customer has to have discretionary spending ability. If they are struggling to cover their rent or mortgage, they are not going to have the desire or ability to add to their already struggling finances. In addition, in order to have the need for storage, they will have to have excess belongings. Generally, only people with higher incomes can amass enough material items to need to store them.
3. The myth that you can build a self-storage facility in the middle of nowhere and fill it up needs to be exposed. Self-storage relies on people – people who need to store stuff. In the absence of population, you have no demand. You cannot build or buy a self-storage facility in a small town of 5,000 people and be successful – at least not successful enough to make any money with it. Population density is key.
4. The majority of self-storage customers find their storage facility from driving by it. It is, in many ways, a point of purchase decision. Few people put a scientific study on where to store their stuff. They look at convenience, and often just pull in to the first one they pass near their home or business. As a result, it is also a myth that you can have a successful self-storage facility that is hidden from view, or stuck on a two-lane street with no traffic.
5. A market of 100,000 population should not have more than 600,000 square feet of space available. If it does, the area is over-built. The best markets have ratios far less than 6. Remember that the density of the market has a lot to do with this. In areas with far denser housing, there is less available land for self-storage facilities, and a greater population to support it. San Francisco, which is extremely dense, is a great self-storage market, where as Stockton, California, always suffers from vacancy.
6. A healthy self-storage market will have a rental rate of around $1 per square foot. This is the number that maximizes the economics of the facility. When you encounter rates significantly under $1, it not only implies that the supply/demand is out of whack, but that you are not going to be able to generate sufficient returns to make the facility a winner.
7. You may have noticed that there is a huge supply of self-storage units in almost every major city in the U.S. – and most midsize markets as well. It is extremely important that you select a market that allows virtually no further construction of self-storage facilities. Otherwise, you may find that the occupancy can never rise above a certain level since there is always more supply being brought on the market.
8. These barriers to entry can include no correctly zoned property, or a high price per square foot for suitably zoned land, that makes building a new facility uneconomic.
Here's a post by Steve Hajewski with Trachte Building Systems, who's a big SS investor:
"I would suggest to attend the Inside Self Storage World Expo in the spring to see all the major vendors in one room. I would agree that for most sites management software is essential, and with the low cost of cameras these should be a standard item on every new site.
Automated kiosks (only one vendor for this, product is called INSOMNIAC) and call centers can help with management duties, but you or an employee will need to visit the site frequently to keep it neat and clean as well as scan for potential problems. I do believe it's a lot easier to manage one that is close to you, but the best available location isn't always where you want it to be. Observing how other local sites are managed will show you the minimum level of service you can offer - I believe that it's a good strategy to build a site nicer than what currently exists in the market with better service, and charge a premium price for it. Rehabbing an existing site to make it premium can be a great opportunity.
Once built, your mortgage and property taxes are your major expenses. Insurance, credit card processing, and utilities are others but are minor compared to the first two. Utilities are a bigger issue for sites with heated/cooled units. If you have an employee, payroll may be your largest expense.
Major maintenance items to watch for on older sites are roofs, especially screw down roofs with failing rubber washer screws that fail (steel roofs are maybe a 30 to 40 year product), driveways at the end of their lives, doors and door springs (the older ones were more prone to rust if not maintained, newer ones tend to be better lubricated or coated). Gates and keypads are a mechanical item that can be a source or headaches for some sites.
If you find a site for sale, try to figure out why. Most sites have a design flaw or something that is a headache. Watch out for drainage problems. of everything that could be wrong, this is a huge problem. "
This is some good criteria to judge a facility against but I would caution against adopting them as hard and fast rules. This is the kind of criteria that REITs use to find facilities. If you are only looking at what the big guys are looking at you are stepping over a lot of big dollars! The more criteria above you can find in a facility the better but by no means should you reject facilities that fail to meet one or even some of the criteria! Just my two cents. There's Millions to be made in facilities that might only tick one or two of these criteria off the list.
Michael,
Based on your experience,what size facilities are beneath institutional investor radar? Less than 50,000 sq ft?
Of course I will use the age old addage...."depends on the market"....that being said, my area of western NY probably represents the smaller markets that Institutional Investors would look at and I spoke with someone just today that represents a buyer. He indicated that 40,000 is their threshold but that can be achieved by a portfolio of small facilities clustered together geographically.
Is there a rule of thumb of how much per sq ft a facility should be generating? I'm looking at a deal know where total expenses are 50% of potential income. That seems high. Is it? For MF, I'd like to see expenses at about 30% of potential income.
The rent generated per sq. ft. will be market specific. Industry standard for expenses in SS is 30-35%.
Post: Best way to locate Self-Storage deals
- Specialist
- Victor, NY
- Posts 823
- Votes 844
Originally posted by @Jon Q.:
Originally posted by @Michael Wagner:
Originally posted by @Jon Q.:
Originally posted by @Christopher Brown:
I teach in the English department at Wake. Enjoying our first snow here in NC!
- I'm not paying a buyer's broker fee - my understanding is that for most SS deals under a certain amount, say mid-six figures, the seller's broker is going to split their fee.
- I've found the local lenders to be between 500 and 750 basis points underneath the institutional lenders so far. The rates have obviously moved a lot over the last eight weeks, so who knows where we'll end up.
- Basically any real property held for business or investment purposes counts as like-kind for 1031 purposes, and while it can get complicated at the margins, real estate for real estate is almost always considered like-kind.
- I think in SS "value" is in a lot of ways in the eye of the beholder. If the seller and I both know that I can turn a $2m property into a $2.5m property in two years with better management, what's it worth right now? That was how most of the conversations we had with sellers brokers went. Particularly with lease-up deals on new development, where we couldn't get anybody to move off their Year 3 stabilized projections. And so we passed on all of those. We finally found what we think are a couple of under-managed (read, non-professionally managed) properties in tertiary markets that have upside: under-occupied, no tenant insurance, no UHaul, no web presence, etc. So while demographics and competition are obviously the threshold considerations, as @Michael Wagner suggests, the management/expansion upside is where the deals are. I'd also suggest to you that because an increasing amount of SS customers come from the web, don't overvalue the vehicle counts. Obviously location and visibility matter, but they don't seem to be the final determinants in the way they were once understood to be.
- And 100,000+ population counts are 5-6 CAP markets in SS these days and those properties are priced accordingly. The institutional money gobbles those properties up - SS REITs are huge players in the A markets. SS is still interesting in that there are so many mom and pop players, but that's less and less the case in the big markets.
- I'd love to stay in touch about the deals I'm working on now; I'll shoot you a direct message and we can talk more.
Good luck!
Chris,
Here's some info I wanted to share as I think others on here will benefit from the info.
This is the checklist I use for SS deals...
| 1. 100 units and up. |
| 2. $50,000 median household income. |
| 3. 50,000 population within 3 miles of the facility. |
| 4. Traffic count past facility of 25,000+ cars per day. |
| 5. Not greater than 6 square feet of storage space per person in the market. |
| 6. Rental rates of around $1 per square foot on existing storage. |
| 7. Buy in distress, if you can. |
| 8. High barrier to entry. |
Here are the reason's for each item on the checklist:
1. There are some major fixed costs in a self-storage facility, the largest of which is the manager. You have to have enough units to support the necessary staff to run the complex. You cannot run a self-storage facility from a kiosk, contrary to what some folks may suggest. And you cannot run it without any form of management. That’s why small complexes in rural markets are always on the market for sale.
2. To pay for storage — $100 per month or more — the customer has to have discretionary spending ability. If they are struggling to cover their rent or mortgage, they are not going to have the desire or ability to add to their already struggling finances. In addition, in order to have the need for storage, they will have to have excess belongings. Generally, only people with higher incomes can amass enough material items to need to store them.
3. The myth that you can build a self-storage facility in the middle of nowhere and fill it up needs to be exposed. Self-storage relies on people – people who need to store stuff. In the absence of population, you have no demand. You cannot build or buy a self-storage facility in a small town of 5,000 people and be successful – at least not successful enough to make any money with it. Population density is key.
4. The majority of self-storage customers find their storage facility from driving by it. It is, in many ways, a point of purchase decision. Few people put a scientific study on where to store their stuff. They look at convenience, and often just pull in to the first one they pass near their home or business. As a result, it is also a myth that you can have a successful self-storage facility that is hidden from view, or stuck on a two-lane street with no traffic.
5. A market of 100,000 population should not have more than 600,000 square feet of space available. If it does, the area is over-built. The best markets have ratios far less than 6. Remember that the density of the market has a lot to do with this. In areas with far denser housing, there is less available land for self-storage facilities, and a greater population to support it. San Francisco, which is extremely dense, is a great self-storage market, where as Stockton, California, always suffers from vacancy.
6. A healthy self-storage market will have a rental rate of around $1 per square foot. This is the number that maximizes the economics of the facility. When you encounter rates significantly under $1, it not only implies that the supply/demand is out of whack, but that you are not going to be able to generate sufficient returns to make the facility a winner.
7. You may have noticed that there is a huge supply of self-storage units in almost every major city in the U.S. – and most midsize markets as well. It is extremely important that you select a market that allows virtually no further construction of self-storage facilities. Otherwise, you may find that the occupancy can never rise above a certain level since there is always more supply being brought on the market.
8. These barriers to entry can include no correctly zoned property, or a high price per square foot for suitably zoned land, that makes building a new facility uneconomic.
Here's a post by Steve Hajewski with Trachte Building Systems, who's a big SS investor:
"I would suggest to attend the Inside Self Storage World Expo in the spring to see all the major vendors in one room. I would agree that for most sites management software is essential, and with the low cost of cameras these should be a standard item on every new site.
Automated kiosks (only one vendor for this, product is called INSOMNIAC) and call centers can help with management duties, but you or an employee will need to visit the site frequently to keep it neat and clean as well as scan for potential problems. I do believe it's a lot easier to manage one that is close to you, but the best available location isn't always where you want it to be. Observing how other local sites are managed will show you the minimum level of service you can offer - I believe that it's a good strategy to build a site nicer than what currently exists in the market with better service, and charge a premium price for it. Rehabbing an existing site to make it premium can be a great opportunity.
Once built, your mortgage and property taxes are your major expenses. Insurance, credit card processing, and utilities are others but are minor compared to the first two. Utilities are a bigger issue for sites with heated/cooled units. If you have an employee, payroll may be your largest expense.
Major maintenance items to watch for on older sites are roofs, especially screw down roofs with failing rubber washer screws that fail (steel roofs are maybe a 30 to 40 year product), driveways at the end of their lives, doors and door springs (the older ones were more prone to rust if not maintained, newer ones tend to be better lubricated or coated). Gates and keypads are a mechanical item that can be a source or headaches for some sites.
If you find a site for sale, try to figure out why. Most sites have a design flaw or something that is a headache. Watch out for drainage problems. of everything that could be wrong, this is a huge problem. "
This is some good criteria to judge a facility against but I would caution against adopting them as hard and fast rules. This is the kind of criteria that REITs use to find facilities. If you are only looking at what the big guys are looking at you are stepping over a lot of big dollars! The more criteria above you can find in a facility the better but by no means should you reject facilities that fail to meet one or even some of the criteria! Just my two cents. There's Millions to be made in facilities that might only tick one or two of these criteria off the list.
Michael,
Based on your experience,what size facilities are beneath institutional investor radar? Less than 50,000 sq ft?
Of course I will use the age old addage...."depends on the market"....that being said, my area of western NY probably represents the smaller markets that Institutional Investors would look at and I spoke with someone just today that represents a buyer. He indicated that 40,000 is their threshold but that can be achieved by a portfolio of small facilities clustered together geographically.
Post: Best way to locate Self-Storage deals
- Specialist
- Victor, NY
- Posts 823
- Votes 844
Originally posted by @Jon Q.:
Originally posted by @Christopher Brown:
I teach in the English department at Wake. Enjoying our first snow here in NC!
- I'm not paying a buyer's broker fee - my understanding is that for most SS deals under a certain amount, say mid-six figures, the seller's broker is going to split their fee.
- I've found the local lenders to be between 500 and 750 basis points underneath the institutional lenders so far. The rates have obviously moved a lot over the last eight weeks, so who knows where we'll end up.
- Basically any real property held for business or investment purposes counts as like-kind for 1031 purposes, and while it can get complicated at the margins, real estate for real estate is almost always considered like-kind.
- I think in SS "value" is in a lot of ways in the eye of the beholder. If the seller and I both know that I can turn a $2m property into a $2.5m property in two years with better management, what's it worth right now? That was how most of the conversations we had with sellers brokers went. Particularly with lease-up deals on new development, where we couldn't get anybody to move off their Year 3 stabilized projections. And so we passed on all of those. We finally found what we think are a couple of under-managed (read, non-professionally managed) properties in tertiary markets that have upside: under-occupied, no tenant insurance, no UHaul, no web presence, etc. So while demographics and competition are obviously the threshold considerations, as @Michael Wagner suggests, the management/expansion upside is where the deals are. I'd also suggest to you that because an increasing amount of SS customers come from the web, don't overvalue the vehicle counts. Obviously location and visibility matter, but they don't seem to be the final determinants in the way they were once understood to be.
- And 100,000+ population counts are 5-6 CAP markets in SS these days and those properties are priced accordingly. The institutional money gobbles those properties up - SS REITs are huge players in the A markets. SS is still interesting in that there are so many mom and pop players, but that's less and less the case in the big markets.
- I'd love to stay in touch about the deals I'm working on now; I'll shoot you a direct message and we can talk more.
Good luck!
Chris,
Here's some info I wanted to share as I think others on here will benefit from the info.
This is the checklist I use for SS deals...
| 1. 100 units and up. |
| 2. $50,000 median household income. |
| 3. 50,000 population within 3 miles of the facility. |
| 4. Traffic count past facility of 25,000+ cars per day. |
| 5. Not greater than 6 square feet of storage space per person in the market. |
| 6. Rental rates of around $1 per square foot on existing storage. |
| 7. Buy in distress, if you can. |
| 8. High barrier to entry. |
Here are the reason's for each item on the checklist:
1. There are some major fixed costs in a self-storage facility, the largest of which is the manager. You have to have enough units to support the necessary staff to run the complex. You cannot run a self-storage facility from a kiosk, contrary to what some folks may suggest. And you cannot run it without any form of management. That’s why small complexes in rural markets are always on the market for sale.
2. To pay for storage — $100 per month or more — the customer has to have discretionary spending ability. If they are struggling to cover their rent or mortgage, they are not going to have the desire or ability to add to their already struggling finances. In addition, in order to have the need for storage, they will have to have excess belongings. Generally, only people with higher incomes can amass enough material items to need to store them.
3. The myth that you can build a self-storage facility in the middle of nowhere and fill it up needs to be exposed. Self-storage relies on people – people who need to store stuff. In the absence of population, you have no demand. You cannot build or buy a self-storage facility in a small town of 5,000 people and be successful – at least not successful enough to make any money with it. Population density is key.
4. The majority of self-storage customers find their storage facility from driving by it. It is, in many ways, a point of purchase decision. Few people put a scientific study on where to store their stuff. They look at convenience, and often just pull in to the first one they pass near their home or business. As a result, it is also a myth that you can have a successful self-storage facility that is hidden from view, or stuck on a two-lane street with no traffic.
5. A market of 100,000 population should not have more than 600,000 square feet of space available. If it does, the area is over-built. The best markets have ratios far less than 6. Remember that the density of the market has a lot to do with this. In areas with far denser housing, there is less available land for self-storage facilities, and a greater population to support it. San Francisco, which is extremely dense, is a great self-storage market, where as Stockton, California, always suffers from vacancy.
6. A healthy self-storage market will have a rental rate of around $1 per square foot. This is the number that maximizes the economics of the facility. When you encounter rates significantly under $1, it not only implies that the supply/demand is out of whack, but that you are not going to be able to generate sufficient returns to make the facility a winner.
7. You may have noticed that there is a huge supply of self-storage units in almost every major city in the U.S. – and most midsize markets as well. It is extremely important that you select a market that allows virtually no further construction of self-storage facilities. Otherwise, you may find that the occupancy can never rise above a certain level since there is always more supply being brought on the market.
8. These barriers to entry can include no correctly zoned property, or a high price per square foot for suitably zoned land, that makes building a new facility uneconomic.
Here's a post by Steve Hajewski with Trachte Building Systems, who's a big SS investor:
"I would suggest to attend the Inside Self Storage World Expo in the spring to see all the major vendors in one room. I would agree that for most sites management software is essential, and with the low cost of cameras these should be a standard item on every new site.
Automated kiosks (only one vendor for this, product is called INSOMNIAC) and call centers can help with management duties, but you or an employee will need to visit the site frequently to keep it neat and clean as well as scan for potential problems. I do believe it's a lot easier to manage one that is close to you, but the best available location isn't always where you want it to be. Observing how other local sites are managed will show you the minimum level of service you can offer - I believe that it's a good strategy to build a site nicer than what currently exists in the market with better service, and charge a premium price for it. Rehabbing an existing site to make it premium can be a great opportunity.
Once built, your mortgage and property taxes are your major expenses. Insurance, credit card processing, and utilities are others but are minor compared to the first two. Utilities are a bigger issue for sites with heated/cooled units. If you have an employee, payroll may be your largest expense.
Major maintenance items to watch for on older sites are roofs, especially screw down roofs with failing rubber washer screws that fail (steel roofs are maybe a 30 to 40 year product), driveways at the end of their lives, doors and door springs (the older ones were more prone to rust if not maintained, newer ones tend to be better lubricated or coated). Gates and keypads are a mechanical item that can be a source or headaches for some sites.
If you find a site for sale, try to figure out why. Most sites have a design flaw or something that is a headache. Watch out for drainage problems. of everything that could be wrong, this is a huge problem. "
This is some good criteria to judge a facility against but I would caution against adopting them as hard and fast rules. This is the kind of criteria that REITs use to find facilities. If you are only looking at what the big guys are looking at you are stepping over a lot of big dollars! The more criteria above you can find in a facility the better but by no means should you reject facilities that fail to meet one or even some of the criteria! Just my two cents. There's Millions to be made in facilities that might only tick one or two of these criteria off the list.
Post: Best way to locate Self-Storage deals
- Specialist
- Victor, NY
- Posts 823
- Votes 844
Originally posted by @Jon Q.:
Have you investing in SS outside of the market in which you live?
What's your target price per square foot when you're evaluating deals OR does this and the storage rates differ so much in each market that you focus more on cap rate, cash-on-cash and IRR over a specific hold period?
I'm a local guy. Both facilities are within 60 miles of my house....I look to be all in under $30 per square foot as a general rule but that is not a driving number for me. Its all about the income. I base my purchases on cap rate and then cross check cost against price to build of $30-35 per square foot plus holding costs.
Post: Grading yard in rental property
- Specialist
- Victor, NY
- Posts 823
- Votes 844
Can you simply fill the low spots with top soil and re-seed? Couple hundred buck and your done.... Or is it more involved?
Post: Out of options Dead Deal?
- Specialist
- Victor, NY
- Posts 823
- Votes 844
Originally posted by @Adam Percento:
@Michael Wagner I believe hes current on mortgage but according to the city website hes behind on taxes owing over $3000.
With a short sale would the bank approve one with the owner being current?
If so how would you present this idea to the seller? and the bank?
I really want to make something work with this one I feel like Its what Im supposed to do.
Hopefully others will jump in here to better help you. Bank usually require that owner be behind in payments but thats not a hard and fast rule. You should call the city and see what thier process is for dealing with delinquent taxes. You want to find out how far away any potential tax auction might be as that could be another avenue.
Simply tell the seller that X is the most you can pay for the property but you are willing to negotiate with the bank on his behalf (requires his authorization to be submitted to the bank) to get them to agree to accept less. Note--he would be responsible for paying Income taxes on the "forgiven amount" and you need to disclose that to him at some point sooner than later. If he agrees, then you start the long frustrating process of getting a hold of the right person at the bank and then helping them understand that the property is only worth X and that as it sits, it will be decreasing in value steadily. The past due taxes are evidence that the owner has no money for upkeep. Ugly pictures will help your case. ...Its admittedly a lot to take on for someone new to REI...perhaps you can ask around your local area to find an agent who specializes in short sales. Be warned, people can work months...or even years....on a short sale to have them fall through....you just have to view the whole process as a free (excluding sweat equity) education to avoid being disappointed if it doesnt pan out. Search here on BP...Im sure there is tons of info on short sales!
Hope thats somewhat helpful...sorry I don't know more.
Post: Buying from seller and dealing with capital gains tax road block
- Specialist
- Victor, NY
- Posts 823
- Votes 844
I'm confused why they would have such a big capital gains hit? If they are selling to you via seller financing, wouldn't they only pay capital gains on the portion that you pay them each year? And isnt the capital gains only 15% as long as their total income is less than $416K this year (20% if they make more than that)?