Today we’re going to talk about planning an investment property transaction.
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: Joining me today is René Nelson, Pacwest Commercial Real Estate. René’s a guru at getting you to bigger units. When you don’t want to go big or go home, call René. Good evening, René.
René Nelson: Hi, Marcia. Let’s talk shop. Let’s talk real estate.
Marcia Edwards: Let’s talk about 10 to 15 units. We had a listener who said I’ve got one or two units of investment, residential. I want to get a little bigger in size and efficiency of that opportunity. We talked about last program cash availability for down payment for that opportunity, what they have in available cash. Experience for ownership, have they been there before? Is this a new thing to them? And risk level is where we left off last program I believe.
René Nelson: Yes we did. When I was talking to that client and basically trying to decide or help him decide if the timing was right, we wanted to also consider, does he want to do a 1031 exchange? Which made sense, because I ultimately knew I was going to send him your direction because he needed to sell a single-family property. so part of the chicken and egg thing though is do you sell the property and then call and try to find a property to replace it? That’s really tough.
Marcia Edwards: Wouldn’t you say you need to do your homework first before you spring into action? Put something on the market with the end game in mind, you’ve got to play the end game out as well as the front. You called me right after you talked to this guy and you said, “Hey, we’ve got a powwow to make sure we get this successful mapped out.”
René Nelson: Absolutely. Because in his single-family property, he has tenants, and there’s a lot of misconception about dealing with tenants in a transaction when you’re going to sell it as an investment. So we’re going to talk about that in some of the future shows. But when
I was talking to this particular owner about that, he said, “I do have tenants that live in it. I’m ready to sell it. I want to do a 1031 exchange. I’m going to use all that money to roll forward into my new property.” So I knew he had a clear path in his mind of what the steps were. And then my next question was, have you been to a lender yet?
Marcia Edwards: Right. So you want to make sure you have the money behind it. And it’s interesting because a lot of people are surprised by today’s rates and opportunities, or what cash they actually do need in addition to the funding for the lender. And maybe less than they think, so it’s something to talk to them early about.
René Nelson: It really is. I can’t tell you how many times I have people call me and say, “Hey, I’ve got a million bucks. What’s that going to buy for me?” And they really don’t have a clue because they don’t know yet how the leverage and the debt works into it and how much money that’ll help them buy units.
Marcia Edwards: Wow. You have people calling say, “What will I do with my million dollars?” That’s cool stuff there, René. I’m Marcia Edwards, Windermere Real Estate. Have a fantastic evening.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.