All Forum Posts by: Taylor Dame

We have a family business in that owns or leases nearly 10 million sqft of mostly industrial RE, some office buildings. About 1.8 million sqft is owned by the family in many different partnerships. This has gotten more and more complicated as some family members have sold their ownership in the business and thus the real estate as well. We are looking at what the Pros/cons would be to consolidate all the family owned real-estate into a REIT rather than individual partnerships with different members in each and have the family members ownership in the REIT reflect their ownership in the business. I am assuming this would be something a good real estate tax attorney would be able to help with. Some of the hurdles I see are:

- We use a lot of 1031's when transacting into new buildings, a REIT doesn't lend itself to that strategy easily

- Would A Delaware Statutory Trust work in this scenario? What happens when one property is sold? Is there a limit to how many properties can be held, added, removed?

@Jack B. I'm curious on those costs you mentioned. Would you mind going a bit more into depth on the $10k+ for COR vs the $2k for 1031?

thanks

@Nathan Carter thanks for taking your time to respond to the discussion. I appreciate the feedback. What do you mean by the cash out refi being cheaper? Are you currently working on anything here in the Boise area? 

@Jonna Weber thanks for the comments. The comment of diversification is something I hadn’t condisdered. Thanks 

I have a paid off condo in Scottsdale, Az that I’d like to leverage to get into a few more deals. I own a few properties but still consider myself a newbie. I’ve looked into all sorts of ways to use this condo as leverage to get access to more cash and do more deals. For my goals I’ve narrowed it down to doing a cash out refinance or selling it and doing a 1031 exchange. I wanted some feedback on how best to move forward with each of these: Option #1 - CASH OUT REFINANCE: The condo is worth $165k (paid off) and I am currently cash-flowing at a little over $600/month after HOA/taxes. My goal with the new loan would be to cashflow at the very least $200/month. In order to achieve that the most I would be able to take out in cash would be around $60k on a 30yr loan at 4.125% (estimates). In my local market I’ve recently been able to achieve a 10 cap with 13-15% roi. That would be my baseline for investing the cash into 1 or more deals here in Idaho. My questions are: Do you have specific parameters when doing a cash out refinance that you like to follow? would you do a 30yr loan on a refi or would you go shorter? Would you be ok with less cashflow on the original property after the refi with the idea that you’ll gain more on the deals done with the cash? Option #2- 1031 Exchange: As I’ve mentioned this condo is paid off and has appreciated really well. I bought it in 2010 for $58k and they are now trading at $160-165k consistently. With the cashflow at just above $600/month I also see the value of a 1031 exchange. I live in the boise, Idaho area and I am fairly confident I could use that money to do 1-3 deals here in Idaho while meeting my parameters of 10cap and 13-15% roi. The largest factor in a 1031 that makes me nervous is the short timeline to identify the properties and go under contract within the 45 days of my property closing, it I’m confident I could make it happen. My questions are: Do any of you have parameters that you like to see when deciding to do a 1031? For example in the current market if someone were to purchase it today it would be a 7% cap and a -6% roi. Compared to when I purchased it in 2010 at a 18% cap and 25% roi. Or do those numbers not mean much to you when making the decision? Would you even consider doing a 1031 with a property that is cash flowing well? Overall, what strategy would you implement? The cash out refi or 1031? What experiences have you had with either? What were some of the harder aspects of each? Thanks for any feedback.

That’s a strategy that I hadn’t thought of. I think that’s a great idea.

I own a property that is paid off and has a value around 160k and has a cashflow if about $600/month.

My goal is to increase my monthly cashflow by leveraging that property. So far the ways that I thought of were the following:

1031: I would potentially be able to turn this one property into doing 3 deals that have a cashflow of 300-400 each at 20% down. Or I could get into a multi unit property at 20% which would probably cashflow around $1500

LOC: I've found that Wells Fargo will do a Line of Credit of about 70% LTV with the property being the collateral with a 9% interest rate with a balloon. In this scenario I would continue to receive the $600/month cashflow from the property and have about $100k to do the BRRRR strategy with. I don't have a lot of experience with rehab and it seems a bit daunting, but by using this strategy I could continually grow my portfolio.

Hard money: by using the property as collateral I could work with a local hard money lender in order to do about the same strategy as above.

I’m a newbie just trying to understand the pros and cons of each and be sure I’m not missing any aspects of the opportunities. Any feedback is appreciated. 

I own a property that is paid off and has a value around 160k and has a cashflow if about $600/month. My goal is to increase my monthly cashflow by leveraging that property. So far the ways that I thought of were the following: 1031: I would potentially be able to turn this one property into doing 3 deals that have a cashflow of 300-400 each at 20% down. Or I could get into a multi unit property at 20% which would probably cashflow around $1500 LOC: I’ve found that Wells Fargo will do a Line of Credit of about 70% LTV with the property being the collateral with a 9% interest rate with a balloon. In this scenario I would continue to receive the $600/month cashflow from the property and have about $100k to do the BRRRR strategy with. I don’t have a lot of experience with rehab and it seems a bit daunting, but by using this strategy I could continually grow my portfolio. Hard money: by using the property as collateral I could work with a local hard money lender in order to do about the same strategy as above. I’m a newbie just trying to understand the pros and cons of each and be sure I’m not missing any aspects of the opportunities. Any feedback is appreciated.

I own a property that is paid off and has a value around 160k and has a cashflow if about $600/month. My goal is to increase my monthly cashflow by leveraging that property. So far the ways that I thought of were the following: 1031: I would potentially be able to turn this one property into doing 3 deals that have a cashflow of 300-400 each at 20% down. Or I could get into a multi unit property at 20% which would probably cashflow around $1500 LOC: I’ve found that Wells Fargo will do a Line of Credit of about 70% LTV with the property being the collateral with a 9% interest rate with a balloon. In this scenario I would continue to receive the $600/month cashflow from the property and have about $100k to do the BRRRR strategy with. I don’t have a lot of experience with rehab and it seems a bit daunting, but by using this strategy I could continually grow my portfolio. Hard money: by using the property as collateral I could work with a local hard money lender in order to do about the same strategy as above. I’m a newbie just trying to understand the pros and cons of each and be sure I’m not missing any aspects of the opportunities. Any feedback is appreciated.

I am a newbie who's trying to get my financing in line before I start throwing out offers on deals. I am currently in the middle of the application process with Wells Fargo to get a Line of Credit against a paid off investment property. They are offering a 60% of the value of the property as a line (about $100k). I am wanting to implement the BRRR strategy in the Boise Idaho market. My question is has anyone done this before? What are the Pro's and Con's. Has anyone done a personal line of credit before and how is that different, pro's and con's? And finally, has anyone had access to both at the same time in order to get into more expensive deals? Is that possible? Or even a mix of LOC and working with a lender. Any insights would be super helpful as I work through this way of financing deals.

Also if anyone in the Boise area wants to connect, hit  me up.

thanks