All Forum Posts by: Timothy Lewis

@Sean McDonnell The forms my friend uses are specific to his firm. They do a ton of volume and don’t use state specific forms. FYI.

@Patrick Risko you can ask to see the bank statements related to the property. Ideally, it would be separate from the seller's personal finances and you would see the monthly deposits.  

Note, this would  be a part of due diligence and likely won't be provided prior to you offer. Be sure to work with an agent who provides adequate contingencies for due diligence. If the seller does not produce the documents, they could be lying to you.

I have a friend who acquires NNN retail sites across the country. I have no idea if he's done a deal in SC, but I can ask him where his company gets their PSAs from. Let me know if that is of interest to you. Otherwise, it might not hurt to offer a minor fee to a local SC broker to provide the appropriate PSA.

Side note. Your profile shows Miami, but your brokering a sale for a SC asset from a CA buyer. Did you get involved from the FL buyer side? Just curious.

Again, not a CPA, but I think your issue is that the original acquisition price includes both the residence and the land. Ideally there would be some portion a value (of the $214k) assigned to all the land and the rest to the residence. There may be multiple ways of assigning the cost basis to the parcel, but a pro rata share of the land cost basis determined by square feet would seem most logical.

For example, let’s say the value of your improvements (i.e., the residence) was $144k and the land was $70k. If the parcel you sold was equal size and similar characteristics as the one with the residence, your land basis in both would be ~$35k each. Therefore, at the sale of the parcel, the gain would be ($173k-$35k) $138k. 

Not sure how you unwind your present situation, but I think the example above is typically how selling a parcel would work. 

I recommend consulting a real estate competent CPA. Good thing there are some on BP. Good luck.

@James Williams Is a 401k loan or similar option a possibility for you?

@Ben Leybovich This sounds like a great idea. I would add that commercial real estate is my day job and something I studied in grad school, so this type of content is 100% up my alley.

For example, I’m working on a reverse 1031 bridge loan, which will be 9-figures at full draw. Prior to getting the OM, I didn’t know reverse 1031s existed. I’m learning a ton and would love to share, but I don’t think the forums is the write avenue. I’m sure I’d need to build more BP credibility to author an article about the experience, but I’d be interested in the feedback and subsequent discourse among those participating in more sophisticated investments.

In the meantime, I’ll keep and eye out for that post.

@Ben Leybovich Definitely helpful. Thanks for the detailed explanation. This would be a great topic and value-add (no pun intended) for an article.

All the best in executing the remainder of your business plan!

Thanks, Ben. Congrats on great execution to date.

Also, I’m having a tough time finding an explanation for the LTL/Rent Bump Ratio.

I’m assuming LTL is loss to lease (how under market current rents are) and rent bump would be the increase you plan to use at rollover.

Are the 65/35 metrics you used percentages, so $1000 in place, when market is $1650 (LTL of 65%), and anticipated rent after turnover is $1350 (35%)? Trying to better understand that metric.

Congrats @Ben Leybovich on what sounds like a grand slam. How far are you into the rehab at this point?

Two more questions:

What is the meaning of the last deal metric in your original post? “In-place LTL to reno Bump Ratio: About 65/35”

Also, to the extent you're comfortable, could you talk a bit more about your financing for this deal? Perhaps, the type of lender and pricing/term?