“Action is the foundational key to all success.” Picasso

The IRS allows for properties that have been inherited to get a “stepped up basis” or a new tax basis based on the property value at the time of the decedents death. Who decides that value? What if the heirs keep the property for years and the value increases or decreases? What documentation can prove the value at time of death? In such a case, you will need a Historical Value Appraisal.

HISTORICAL VALUE APPRAISAL A simple google search will tell you that historical value determines your property’s value at a past date. A retrospective or historical appraisal is a detailed in-depth analysis of a property’s value as it would have been at a past date. It can help you determine the market value of your property at a market date in the past.

WHY IS IT IMPORTANT? This document can determine how much of a capital gain you will have on an inherited building by determining what the property was worth when you inherited it. The longer you keep the property, and the more it appreciates, and the more you improve it, the more important this could become.

WHO CAN HELP ME WITH THIS? Your CPA and your real estate attorney are your main advisors when it comes to selling or exchanging your building but they will probably need to bring in a fee appraiser who specializes in this type of appraisal. Some appraisers are licensed for 1-4 units and some are licensed for commercial properties with 5 or more units. That is your first consideration, but you need an appraiser who is experienced in appraisals from years back. There are some appraisers who do mostly or exclusively historical value appraisals. If you need this service, I can give you some good referrals, but involve your CPA and your real estate attorney in your final decision. You could be talking about a potentially large amount of money in capital gain taxes.

If you have an inherited property that you are thinking of selling, choosing the right appraiser can make a big difference.

“Find the good. It’s all around you. Find it, showcase it. and you’ll start believing it.” Jesse Owens

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.