Repositioning my portfolio - Posted by Remington

Posted by Remington on September 02, 2008 at 08:51:14:

Yes, I’ve done a few 1031’s and am resigning myself to the fact that I’m probably looking at paying some capital gains. My ideal would be Apts with at least 100 units, but I’m open to anything other than industrial properties.

Repositioning my portfolio - Posted by Remington

Posted by Remington on August 31, 2008 at 11:44:40:

I have 5 SFH as rentals.

I have one very small office building. I also have 3 commercial lots.

These properties are free and clear.

The goal is to transition out of SFH and have a completely commercial portfolio and I’m not sure any of those five properties would put me in position to make a big deal via a 1031 or the like, but combined they might.

I’m looking for the best options to carry the most equity possible forward as we transition to commercial.

Any advice is appreciated and thanks in advance.

Re: Repositioning my portfolio - Posted by lee

Posted by lee on September 13, 2008 at 24:44:55:

a c/o is a non taxable event. You will want to talk to a good cpa about the possability of transfering title of all property you wish to liquidate to a corp before liquidation, then purchase your new porfolio as that corp so you spend near all of the proceedes as a capital expense " land holding company"
Any questions Do not hesitate to ask

Lee
LEED NC AP
lee.lobaugh@cox.net
Building Green Makes Financial Sense

Re: Repositioning my portfolio - Posted by Connie Stephens

Posted by Connie Stephens on September 05, 2008 at 07:13:28:

Right now it is hard to sell SFH at any where near the appraised value. Therefore I think, the quickest way for you to make the transition is to do the following:

  1. Get a line of credit using all of your properties as collateral. This will give you the opportunity to at minimum have the downpayment and liquidity necessary to purchase a large commercial property. Or you can purchase small commercial for cash, which will give you a better bargaining position with the seller and a quick closing. Most banks will give you a line of credit for up to 80%LTV on the SFH and commercial property. And up to 70% LTV on the lots. Because loan proceeds are not taxable you can get the LOC and use those funds just like cash to operate and expand your business.

  2. Once you locate the commercial property you want to purchase, you can have your bank cross-collateralize the subject property with your existing R/E for the down payment/equity on the purchase.

Both of the aforementioned options allow you to purchase new commercial R/E, with no out-of-pocket costs to you. You are just leveraging the equity in your current R/E portfolio. If you were my client I would recommend option 1, because it gives you the most flexibility.

If you have any questions, email me.

Connie

Re: Repositioning my portfolio - Posted by MaxC

Posted by MaxC on September 03, 2008 at 09:27:51:

Why do you want to move to commercial over SFR’s?

Re: Repositioning my portfolio - Posted by John

Posted by John on September 03, 2008 at 04:26:37:

Rem,
Shoot me an email with your contact info and a brief summary on the properties. I have some exchangers that may do your deal. BUT It will cost you a cup of coffee though for the intro.

Re: Repositioning my portfolio - Posted by kiki

Posted by kiki on September 02, 2008 at 08:42:47:

keep in mind, there are strict timeframes with 1031’s, so you would need to sell all of your properties and find another property to buy in like 6 months or less i think. you might just have to pay capital gains tax on some of the properties. what type of property would you be interested in buying?