All Forum Posts by: Paul A.

I've got a few properties around Tallahassee and for the most part have been selling off my student stuff.  It's the biggest headache and I've started to notice the effects of all the new apartments.  I still have an couple of sfr's but I would stay away from anything attached for students.  Like @Mike Conner said blue collar neighborhoods seem to be a better bang for your buck.  

Dale Osborn I've heard of that happening especially in the northeast to replace older run-down homes with new complexes. Which is a pretty loose definitely of "for the public good" that they are suppose to be able to condemn under. This is to build a fly-over bridge. So I'm not worried about that.

Michael D. I will be negotiating. We haven't made it that far yet. As far as getting a lawyer involved, I'm note sure if it's worth it in my case. My understanding is when you get a lawyer involved whatever incentive the city has offered you goes away. So in my case. If the appraisal came back at $400k and they offered me $500k, a 20% incentive, I would have to risk 100k that the lawyers would be able to prove to a jury that the property is worth more than $500k. Say the lawyers got the jury to agree it was worth $450. There fees would come off the top of that and I would end up with less in the end. Plus in this case it's going to be hard to convince a jury that a property I just bought for $100 is now worth $500+ 6 months later. Kind of complicated. Either way I don't see it being an issue yet. Although I don't have any hard numbers I know they will offer far more than market value.

Fortunately Florida doesn't have a state income tax so that won't be an issue. Just talked to my CPA. He said most likely 1033 is the way to go because it is some much less stringent in most of its provisions than a 1031 exchange. I won't have to pay a intermediary to set up the exchange, I will have 3 years instead of six months to find a replacement property, and I won't have to worry about matching debt on the new property. Thanks for all your help guys.

Wow, great info Steve thanks. I'll have to check with my CPA for clarification on how to proceed.

[how do you know you are getting that much??]
I know what they've paid for similar units. I know what type numbers the appraiser is going to be using in his report for revenues, vacancies, expense ratios, and cap rates, so I've got a pretty decent idea of what range it will be in. Also the city has told me they will offer a 15% incentive above appraisal price, which I know some owners have gotten as high as 30% incentive.

[Did the appraiser share with you a copy of the report they did for the city??]
No. Because he was commissioned by the city he can't share the report with me. Right now the city sent his appraisal off for a "technical review" by a third party appraiser. I'm suppose to see the appraisal when the city makes the official offer.

[How is the city paying for the land acquisition??]
Cash. Tradition closing with a local title company.

[What has the other owners wait time been before the city could close on it??]
It varies from parcel to parcel. I know for one property the process was about 18 months. However for the first year it was all inform discussions. Both parties knew they needed the property, but the city wasn't willing to act yet. Right now the city is hot to trot because construction is suppose to start next spring. The first time I talked to the city they told me it would be 2-3 months before the appraiser contacted me, and the appraisal ended up being done a week later.

So if I'm understanding you correctly, you aren't really suppose to do a 1031 on short term projects, but I may be able to make a case for it because it wasn't my intention?

Hello all. New here, but I've been a full time investor for a few years now. Anyway, I'll get to the point. I bought a small REO apartment complex three months ago for $100,000. It was totally trashed. Vandalized stole all the wire out of three units. Between purchase price and rehab cost I've got about $150,000 into it. My goal was to keep the property long term because it cashflows so well. However right as I was finishing the rehab, I get notified by the city that they are going to be acquiring my property for a city project. I've talked to the city, several other property owners in the area that have already sold to the city, as well as the appraiser when he came out to do the appraisal on my parcel. Nothings official yet but from what I've gathered I'm looking at getting somewhere between $450-500k from the city. Obviously a huge unexpected gain. I'm not complaining, but what can I do to reduce my tax bill. I guess my question is, if I do a 1031 exchange and acquire another property, which I then hold for over one year. Will it then be considered a long-term capital gain? Or will I still be subject to the short-term gains from this property.