October Update: East Bay Property owners 1031 Exchange Options

In numerous conversations with multi-unit owners in October, many are asking about options to sell their property.

As we get further into that discussion, we have discussed next steps.

I have spoken to a few owners that want to sell their apartment buildings. They don’t want to deal with tenant issues and don’t want to be involved in management. I have mentioned doing a 1031 Exchange into a triple net lease.

Another option, but not as well known, is the Delaware Statutory Trust, or DST.

I have researched, interviewed, and spoken to 1031 Exchange specialists and DST brokers.

Click DST Explained to get a quick overview.

Second, here is an interesting article regarding DST options:
DST Options During Covid

The basics are that you become a partial owner of a larger property purchase. You are paid a monthly check, at a preferred rate (5-7%).There is no work to be done. The only issue is that you can not sell your interest when you choose. The DST has a plan in place, usually to sell in 5-6 years. At that time, you can take out your investment dollars and do one of three things:

  • Put into another, new DST.
  • Use your investment dollars to do a traditional 1031 exchange.
  • Receive the proceeds and pay taxes at that future date.

Please reach out if you are interested in getting more information on the DST option for your exchange.

If you have an upcoming vacancy, it is still important to check websites, such as Craigslist, to determine your current market rent. If you have a low level of interest and /or low turnout at an open house, but one party wants to take it, its worth it if they ask for 2 weeks or a month of free rent.

Here is the new notice with rules for renters during Covid 19 (through January 2021): CA State Rules for Property Owners during Covid

Here is an article that summarizes the California Apartment Association:
CAA advice fo rents during SIP:

Please feel free to reach out to me with questions or concerns.

I closed a 4 Plex in Oakland in September, we got an over asking price offer with no inspections. Things are still closing, although it does require some creativity around inspections, appraisals, and one on one showings.

Oakland/Berkeley Rental Market

Before the “shelter in place” directive, the rental market was still solid and jobs were still being added to Oakland and Berkeley. As we get through this, that should continue.

I did a presentation on increasing your rental revenue at the East Bay Rental Housing Association in last year. Click Here: Maximizing the Return on your Investment for the highlights.

Interested in getting a valuation of your buildings?

Contact me and we can do an estimate with a quick drive by. Getting your current rents/number of units will allow us to get a estimate of value. Again, if you have any questions about rents for an upcoming vacancy, questions about tenant’s issues, or need advice on a repair person, please do not hesitate to call or email.

Why you’ll benefit from working with me

In addition to managing our properties for the past 20 years, I have worked on 65+ multi-units transactions in the past 10 years, as a real estate agent specializing in multi-unit properties. I have learned so much from both perspectives. Most importantly, this is a complicated process much different from working with single-family home buyers and sellers.

The goal of this newsletter is get feedback and share with this community our successes and challenges to make all of more successful and increase our cash flow! Questions about market rents for your units, tenant issues, or need specific repair people? I can help. Please give me a call or an email.

Looking forward to our beautiful Fall weather!