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ARTICLE -
Selling Apartments by
Robert Poe After owning a
facility for several years, an investor may
decide it is time to get out or upgrade into
more units. At the sale, you have essentially
three choices:
1) Cash out and pay any taxes
2)
Do a tax free exchange into another larger
property or different property
3) Take some of
your equity out as cash and buy a comparable
facility and continue on. None of these
decisions should be made WITHOUT consulting your
tax advisor and your commercial real estate
broker.
There are many investing, legal and tax
pitfalls and they can come out of nowhere and
cost time and money.
If you choose to
do a 1031 tax free exchange, there are a lot of
moving parts to the process. Two of the most
important considerations are 1) marketing your
current property and 2) finding a replacement
property. Planning is essential because there
are many arbitrary time deadlines in a 1031
exchange and these deadlines must adhered to
strictly or you may lose your tax deferral
status.
In addition, the
market in multi family is constantly changing.
Capitalization rates are moving around, and
investors are very picky and selective now. This
situation may change over time, but the
apartment market is hard for even professionals
to evaluate now as the economy changes. Again,
consulting with a knowledgeable real estate
professional is a must in this trying market. We
are happy to represent apartment sellers and get
you the best price for the market. Please call
our office at 503-351-5025 for a property
evaluation and consultation.
- Submitted by
Robert Poe, CCIM, Certified Real Estate
Professional |
