All Forum Posts by: Zac Lindquist

Situation: In 2022 I sold an 8 unit complex and did a 1031 into another 8 unit complex and I wasn't able to fully use my 1031 funds. I knew it wasn't ideal for this to happen but I was only willing to purchase a property that penciled and made sense to own with strong potential upside. I ended up with around $220k of "boot" that wasn't reinvested.

Relevant Background about me: My wife and I both have full-time W2 jobs and we are not real estate professionals according to the IRS. We also own around half of another 22 unit in the Portland area that cashflows pretty well but our standard depreciation seems to cover most, if not all, of the cashflow from this property.

Question: If I have a cost segregation study completed on my 8 unit (PP of $1.2M) that I purchased in 2022 will that paper loss reduce the tax on my "boot" from my 1031 that I partially failed in 2022? My current understanding is that the additional paper loss on my cost seg of this new property will not reduce my tax liability from the sale of the original property. Is this accurate? Do you have any recommendations or ideas of how to reduce this tax bill at this point?

Looks like I'll owe $50k or so on taxes and depreciation recapture according to my CPA and my understanding above is from a conversation with him. If you have experienced this, or are a CPA or have ideas on how to best handle this, I'd greatly appreciate the advice!

Fun fact, started with a 4 unit owner occucpied and have worked my way up to 30 units in Oregon. BP has been a great resource!

Erik

Hello all,

I am wanting to buy an apartment (one room) in Portland for investment. What are your experiences with this? Thank you

Our go to realtor in Portland is Brian Eustis at Premiere Property Group. He's been our agent on 3 real estate transactions dating back to 2008. Earlier this year Brian sold our long-term rental in SE Portland and connected us with a great attorney to facilitate a 1031 exchange. He also personally invests in Portland long-term rentals so knows the unique things investors are looking for.  We've shifted our real estate investing to Bend and have a great agent there too if you are interested.

Hello all! I own four rental units in Portland, OR (one duplex and one SFH with ADU). The SFH is currently my primary residence, and I manage all my own rentals. However, I am preparing to leave the country for an extended period of time and looking for property management while I am away. If you have recommendations for small to mid-size property management companies that you have worked with and LOVED as an investor, please send my their name. My only experience with property manager in the past was very negative, so I'm quite nervous about my options here. Feel free to reply here or send me a PM. Thanks!

I'm looking at options for my current residence (3 BR, 2 BA house) in Portland, OR. I'm not sure if it makes sense to sell and invest elsewhere, or rent it out as a long term rental. (Portland doesn't allow whole 3 BR houses to be rented out as short term rentals.) We have about $190k left on the current mortgage at 3.75% interest and about $360k in equity. I'll need about $200k to buy the next house, so if I'm not selling I need to get a home equity loan. There are a few questions I think BP can help with:

1. Does anyone have any legal advice for managing a long term rental single family house in Portland? (Attorney and PM contacts would also help.) I know it's a very tenant friendly city, so I'm worried about the legal side of things and I want to get everything set up the right way.

2. Getting the right terms on the home equity loan is the key to keeping it as a rental from a cash flow standpoint, keeping the favorable existing 3.75% mortgage intact. Any recommended investor friendly Portland lenders out there that I should talk to?

3. The alternative to renting out this house is that I could take about $100k from the sale and invest it elsewhere. I'm comfortable with new development, or in Ohio rental markets (Columbus, Cincy, Dayton metro areas). Obviously understanding these investment alternatives would be on a case-by-case basis but my gut says the low interest rate on the existing mortgage makes the existing house the most fruitful deal since the Portland market has been appreciating faster than Ohio markets for the past 20 years. Development might also make sense if construction and land prices pull back a bit. What are other people's thoughts on this option?

I'll gladly repay any advice or suggested contacts with architectural advice (~15 years experience, mostly in new multifamily apartments).

Thanks in advance everyone!

Ok. Wow! And you will get market rent for renting a room the same as a 1 bed 1 bath. That’s interesting and worth looking into. Do you think finding a place near a college is important if renting to students? 

So let’s say one side is 3 bed 2 bath and owner occupied is 2 bed 1 bath. You are saying renting out four rooms and then living in one room? What are you renting out each room for? I like this idea. Where do you advertise to fill the rooms? 

Could you air bnb each room in the unit? That seems possible too.

Pay $1400 for rent in 2 bed 1 bath. I’d have to find something that has higher rents already as I cannot move rent to $1600 instantly. On the flip side with that properties I’ve evaluated with higher rents in more desirable neighborhoods are like $650K which puts me back at square one lol! 

I did agree that appreciation, equity and tax benefits are valuable!