It seems like the rush to apartment building investment may be slowing down–lenders are reporting that while lots of things are going into escrow, almost just as many are falling out. Have the returns (cap rates) compressed (lowered) so much that asking prices are just not reflecting the values lenders (and thus buyers) need to…
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I was having breakfast with a colleague this morning, and I explained that a seller I was working with had been told that his asset was worth $1-$2 million dollars more than I had calculated. Now, when I’m valuing a property I look at the income, I look at the comps, and I look at…
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Have you inherited an apartment building recently? It may be better to sell it now rather than later because of your stepped-up basis. Check with your tax advisor to find out whether it’s best to sell now… Inherited Property The basis of property inherited from a decedent is generally one of the following. The FMV…
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A common practice when closing the sale of an investment property is for the seller to give the buyer a credit for any security deposits held by the seller and any rent that is to be prorated between the seller and buyer.  If the seller is doing a 1031 exchange, it’s important to understand how…
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I know, I know, it’s absolutely confusing. Why does property A have expenses totaling 8% of the gross while property B has 38%? Why isn’t this calculation standardized? Both are hollow-tile walk up buildings, both are located in the same area, and both have the same utility services. The answer is simpler than you think:…
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I recently joined Bigger Pockets, a real estate investing forum that specializes in discussing cash flow and is mostly geared to the investor. I’ve been looking for an audience to discuss my expertise with for a long time now, and Bigger Pockets seems to be just that–a community of savvy and sophisticated investors dedicated to…
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The city spent $6.9 million to buy a three-story, 24-unit walk-up apartment building on Beretania Street to be used for low-income and homeless housing. The purchase of the building at 1727 Beretania St. — makai of Central Union Church and not far from the high-rise where President Barack Obama was raised — is expected to…
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On April 30, 2014, the Hawaii state legislature passed House bill 1503 relating to medical marijuana use in your apartment building by your tenants. Essentially, the new law allows the use of medical marijuana if your tenant has a valid certificate. The BIG BUT here, however, is that if you don’t allow smoking in your…
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Having a pet is a privilege many tenants would pay more to enjoy, but did you know that in addition to collecting a higher rental rate, Hawaii’s law now also allows you to collect a pet deposit equivalent to one month’s rent. Whereas prior to this change, one month’s rent was the maximum a landlord…
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Our state recently adopted a new rental agreement, effective May 2013, which adheres more closely to the Federal Service Members Civil Relief Act and clarifies a bunch of other things.  Previously, the Hawaii Association of Realtors-approved form was vague, allowing service members the latitude to interpret the language, resulting in a lot of landlords being…
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http://firstexchange.com/content/exchange-expenses-how-find-hidden-boot-1031-exchange

The tax rates haven’t been raised…YET but here’s a handy calculator to figure out your net proceeds from a sale with the intent to exchange

I have a friend who is extremely fearful of purchasing a home, even though he’s gainfully well-employed. He keeps hearing from his friends and family about how they are underwater on their mortgages, how they can’t make ends meet, and how it’s all because of the bad loan they got to purchase their home. What…
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I just attended the CCIM/BOMA 2013 forecast for Hawaii, and I learned a lot about what to expect out of the next twelve months. 27% of all transactions in our state last year were multifamily. That’s mostly because there were two huge projects that changed hands. Usually it’s about 8-10% 83% of those transactions were…
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Can’t find anything on the market that appeals to you? Contact me for more information about these deals and more!

Source : http://firstexchange.com/January2013Newsletter   There has been some question as to whether taxpayers could use a §1031 exchange to defer the new 3.8% tax on investment income.  The IRS has issued proposed regulations that answer the question with a resounding “Yes”. The new tax is an additional 3.8% tax on “unearned income” which is generally defined…
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REITS are performing better, which means you have another option for your exchange.

Most of my listings are off-market, meaning they are not advertised. The majority of the properties I sell are not on the Multiple Listing Service (MLS). Owners who publicly list their properties generally receive a lot of interest from the public and field more offers in a shorter amount of time. They typically have better…
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It’s a new year, and I’d like to wish all you visitors and guests to my site a prosperous and enjoyable 2013. Thank you for your patronage, your business, and your thoughtful comments. Keep them coming, as the conversation about investment strategies in this fiscal-cliff-climate is certainly at the heart of the best strategies and…
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THE CASE FOR LOWER MULTIFAMILY CAP RATES BY BY MARK SCOTT DECEMBER 8TH, 2012 Attend any number of multifamily conferences around the Tri-State region and cap rates are sure to be a topic of discussion. But while many suggest that cap rates for multifamily rental properties will flatten in the future or even rise, I…
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