“Progress always involves risk. You can’t steal second base and keep your foot on first.” Fred Wilcox

Have you received an offer on your building that sounds exactly like what you have been looking for? Are you ready for no more conflicts with tenants, not dealing with all the new rent control legislation and not fighting for reasonably priced insurance? Are you tired of costs for repairs skyrocketing? These are just a few of the many reasons you may be considering an offer on your building. My advice is that you check with your CPA and your real estate attorney before moving forward, to make sure you are not missing something in the offer and to make sure you are making your best move tax-wise.

NOW WHAT? There are many alternatives to doing a 1031 exchange on your property. You can purchase a larger building or a smaller building. Maybe something closer to your home or some newer construction? Can you improve your cash flow while reducing your management obligations? Perhaps a triple net leased property with little management requirements. If you go this way, remember any business can go under, potentially leaving you with a unique looking building which may be difficult to re-rent. Is it on a pad so that you could potentially get another fast food franchise, for instance, to build to their specifications? If so, what will it cost you? Would you be concerned owning a property if it is in another state as many triple-net opportunities are located in other states.

WHAT ELSE CAN I DO? There are alternatives other than the 1031 exchange to reduce or delay taxes on your hard earned capital gains without giving too much to Uncle Sam.

Vehicles like a Delaware Statutory Trust can keep you in real estate with a group investment without management requirements. The Delayed Sales Trust can allow you additional time and a broader choice of potential investments. There is also the installment sale, which can allow you to take your gains over several tax years. This could be advantageous if you are close to retirement age.

DO SOME HOMEWORK. Remember, I am not an accountant or a lawyer and I don’t give advice in those areas. I am a real estate broker. My job is to help you sell your building to get the best return for you and to help you with your next investment or exchange. Always consult your personal CPA and attorney before making such a potentially life-changing move. Even if you know what you have in mind, the experts may give you useful advice that can save money and grow your investments.

“Don’t give up on your dreams or your dreams will give up on you.” John Wooden

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 or you may want to move into a more passive real estate investment, such as a triple net or a DSL.. 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.

We look forward to a prosperous 2025 and we look forward to be of any help we can to buyers and sellers of multi unit properties.