All Forum Posts by: Taylor L.

Delaware Statutory Trusts, Deferred Sales Trusts, and 1031 into a Syndication via Tenant-In-Common may be options to dig into. We do 1031 TIC deals, all of the moving parts can be difficult to juggle at times but worth it if the tax deferral is significant enough.

If it's any comfort, the complexity & frustrations are pretty common for 1031 Exchanges. Big tax bill on the line, several complex transactions in the way, and a ticking clock!

As far as your current contract & the buyer retrading, talk with your realtor. They should be able to advise you about the terms of your contract and whether you can back out on a retrade.

Have you engaged with a QI? They should be able to advise on your various replacement property options and whether they're compliant.

Totally depends on the deal, but 50-60% is the range these days. I'd just say go talk to a lender in your area. Know your numbers (including DSCR) and be ready to talk resume. That terminal DSCR figure will be incredibly important.

I'd consider partnering on the deal with someone who can bring capital. You won't regret having too much cash in the bank. If this is your freedom/retirement deal, best to be careful and look before you leap!

I'd speak with lenders in your market before closing on the deal. We are not seeing anything near 80% LTV these days. That could change by the time you're ready to refi, but it also might not.

Naturally, do your on-site DD. I've had so many plumbing issues with 70s build properties, I don't do them anymore. If you get lines scoped (for example) and find issues that could give you a good negotiating point with the seller.

It does sound like an interesting deal and it's great you know the area. My hangup would really be amount of leverage.

What is the age of the property? Where did your $30k/door come from?

What is your plan to refi out of the various debts you're taking on? Bear in mind the metrics that banks will look at, including DSCR and LTV.

I don't like the amount of leverage going into the deal. I'd rather partner with one or more equity investors. However I do like the fact you have seller financing with a 7 year balloon. Lots of runway on that. I'd need to look at the financials to determine if the $5.07MM price is reasonable.

Why wait to get in the game? It'll be harder to bring on team members if you're not planning on taking action in the near term.

We've had success with all-cash purchases of midsize multifamilies in tertiary markets. It means raising more investor capital and being ultra-selective about which markets you pick. Many tertiary markets in the rust belt have poor economic conditions and declining populations, making real estate investment in those areas a bad move (in my book). 

Seems like a big big risk for Fair Housing complaints.

Yes, if you are offering a security. It doesn't matter if they're friends and family or if it's 1 person, 7, 10, 20, etc. Look up the Howey test, it is how the courts determine whether a security is being offered. 

 506b requires self-identification, 506c requires 3rd party verification.

Michael Blank's Syndicated Deal Analyzer has been popular in recent years.

You're not looking for an IRR calculator, rather you're looking for an underwriting tool. IRR is one of the outputs of an underwriting tool, but there are several other important metrics to take into account as well. Cash on cash return, DSCR, and Equity Multiple are a few to consider as well.