Hello everyone and Welcome once again to another episode of Selling Greenville your favorite real estate podcast here in the greater Greenville area of South Carolina I am your host Stan McCune realtor right here in technically Greer South Carolina and you might hear the planes flying over because there's more airplane traffic than we've had the past year and I live right near the airport so you might hear some of that because the airport is actually GSP airport is in Greer believe it or not I know that's heresy but that's the way it is it's dishonest maybe a little bit deceptive but you fly into Greer you don't fly into Greenville but nonetheless I am your host realtor right here in in the Greenville area and all of my contact information is in the show notes should you need me should you need realtor should you want to talk about the podcast I am always happy to do that if I missed your call or Miss or don't immediately respond to your text don't worry I will get back with you that is what I always do that's what I'm known for everyone always tells me that I'm very responsive and that's the one thing that I can promise to to everyone is that I Tred to be as responsive as possible you're not going to call me and find that my voicemail box is full like a lot of other Realtors that drives me crazy and yeah reach out to me be happy to talk to you as well as I always say please leave a rating or review for the show I greatly appreciate that and it helps to get the show out to the masses today I'm going to be talking about a recent listing that I had and I'm hoping that it sells this week it is or sorry not this week next week it is supposed to close fairly soon we're just waiting you know as always always waiting in real estate we're just waiting to get to the finish line here but as you guys know I am a residential realtor but as a residential realtor sometimes I find myself in this like pseudo commercial space because what ends up happening is in the residential space you get some small multif family duplexes triplexes quadruplexes and and sometimes packages of those things and really in the commercial space is more when you start getting more into the larger multif family deal apartment complexes and things like that and I've recently had an interesting opportunity to sell to list again we're still waiting to get to closing but to list a package of 15 condos now this is a really interesting unique situation where these are 15 condos in a community that has around a 100 condos and and these condos are kind of spread out throughout the community so they're not all in one building and there is an HOA there are HOA fees and so you really don't control the exterior structures of the buildings you you really have in essence the the Interiors of of the buildings as as common place condos and you don't have any land but these condos they all have cash flowed very well they've all had great rental history and so there is a lot of of things going for them so I had this unique opportunity with with this unique package to list all 15 of them as kind of one single multifam listing that the kind of listing that doesn't normally come up on the MLS it's it's a a pretty rare type of situation and I just want to I I just found it interesting some of the things some of the experiences that I had in dealing with that I thought that you all would would find interesting particularly those of you who are investing in in real estate here in Greenville when I I listed these it you know right away I didn't hear anything but like about 24 to 48 hours after they went on the MLS my phone started to to blow up and it really didn't stop until they went under contract and I was getting calls from anyone and everyone and what I I already knew this but what I really learned what what what was really solidified in my mind is that there is really a massive demand all through the US for small investment portfolios I was getting calls from Nevada I was getting calls from Virginia I was getting calls from California I was getting calls from all over the place people that saw this and you know it was listed for a very fair price we had we had it listed for 1.85 million $1,185 th000 for for 15 condos all in Fairly good shape as as far as we knew and there is just a tremendous amount of demand out there Nationwide for this type of arrangement like I said I was getting calls from all over the place and the impression that I get is that green it being in the Greenville area helped but that this is just a nationwide thing people are just looking to scoop up these types of deals and my hunch is that if I had been able to list the whole Community all 100 Doors I probably would have gotten that under contract right away as well unfortunately most of the people in the community because they're making so much money off these condos did not want to sell so I tried to get a few other people to sell because we had a few actually a few sellers together in in on this but it at the end of the day 15 was the most that we could do but I was getting calls from people that were like hey can you get us more how many more of these can you get people telling me hey if you ever get another deal like this please keep my number call me it got honestly to be overwhelming it was just like I I don't know how I can possibly you know obviously I've got a CRM and whatnot to keep up with different people but like keeping them all straight you know when you get called by 30 40 different people it was nearly impossible so and and interestingly I got calls from several people that I knew some people that were perhaps you're listening to the show that were like hey Stan why didn't you tell us about this and you know there were various reasons why some people I told the deal to and others I didn't simply because I know what my clients and what my my friends and my colleagues are looking for and for some people I didn't feel like this was going to be the good fit for for the type of for the type of real estate investment that they were looking to do but the long story short is there is a ton of demand in the US for these types of portfolios and I think it would have sold you know I think I could have listed it for dramatically more if these 15 units made up the entire Community cuz that the biggest complaint that I got from people was okay we're only going to have 15% of the community and there's an HOA we don't have control so that was a concern that that a lot of people had which is exactly what I knew would happen that didn't catch me by surprise at all but it just reinforced it even more that okay if I had the entire Community for sale it would sell in a heartbeat another takeaway that I had from this is and and again this was something that I I kind of knew but I didn't know it to the extent that I know it now people are desperate to do 1031 exchanges and for if you're not big into real estate investing you're not sure what a 1031 exchange is it's a way that if you if you have a long-term investment in real estate you C you can sell that real estate investment and then within a certain period of time identify a property to replace it and purchase that property and then in essence your capital gains tax that you would have paid which would be a lot of money gets deferred you can kick that can down the road and you might want to do that for a variety of reasons you might want to wait until you have more money to be able to pay your capital gains taxes or you know if you're playing the long game at least the way and you need to talk to a financial adviser or a 1031 intermediary to to get more specifics on this but classes that I've been to the way it's been taught to me and the way I understand it and this is not advice again got to clarify this but my understanding is that if if you have a properties that you have deferred capital gains on by means of 1031 exchanges and then you die and that property is inherited by your children that your children do not have to pay that capital gains tax I don't know all the nuances of a tax law somebody I mentioned that to someone recently and they were like well what about the death tax and it's like you know I don't know how all of that works together I am not an accountant talk to your accountant if you have questions about that but the long story short is that 1031 exchange is a way to defer and and maybe in this very rare situation make it to where nobody ends up having to pay capital gains tax if if you die of course and your children inherit the property and so there are people that are really desperate to do this because what there is is there's once you sell real estate and you're wanting to reinvest the proceeds from from that investment that you sold into another investment in order to not have to pay those capital gains right away you only have a 45-day window when you can legal legally identify the next property that you're going to purchase and that is not very long I mean 45 days the lack of inventory right now which we talk about I know at nauseon this podcast but it's such a major factor in the market today but investors are just desperate I think this is why I was getting calls from all over the country a big part of it these people were looking to do 1031 exchanges and were just like oh man I've only got a couple of weeks left to identify a property I've tried on several of them none of them have worked out and here they are they're kind of they're kind of stuck and that's something that you know obviously as a realtor I'm I'm kind of like I wish I could tap into that market more I have in the past i' I've had several clients over the years do 1031 exchanges but what's interesting is how few of these people as well are are being helped by a realtor that that's a fascinating part of it as well and they're trying to to go about it on their own and that that might be part of the the Fool's errand of it all there are a lot of Realtors out there that don't understand how a 1031 exchange works I feel like I have a pretty good understanding of it I've gone to classes I'm actually in the process of potentially doing one myself with some properties that I'm selling and so after that I should really know how it works but that's just something to keep in mind have don't just go at it on your own if you're trying to do a 1031 exchange so that was another another takeaway another major takeaway is and and again none of these were like like I had never realized this before type of takeaways but it was more just reinforcing it in a very real way because this is real money right you know now we're talking about over a million dollar deal like this isn't chump change right we're not talking about purchasing you know this isn't Joe Blow purchasing a duplex for 250,000 this is this is real money now this is this is the big boys there is some serious money being thrown around right now obviously in the US but obviously here in Greenville as well and you know at the end of the day the offer that we accepted was an all cash offer all cash offer and you know even the people that were looking to finance it they were looking to bring a tremendous amount down one person had you know over 700 ,000 that that he was you know trying to put down and then you know going to finance the rest I mean there is a tremendous amount of money being thrown around in the real estate world right now and interestingly some of the the people that contacted me a large number of the people that that contacted me about these condos let me know in one way or another that that they were immigrants and I find that very interesting as well and and I'm not going to try to I I have be careful when I'm talking about immigration related stuff this is not a politics podcast as a realtor I have to be careful you know in terms of fair housing how I how I handle some of the Delicacies there but whatever your I if you picture you know that like you know the average person that is buying up these rental properties are just these you know American Born hedge fund guys you got to rethink that there is there are some wealthy people from other countries in in our nation and they are looking to buy real estate and they're they're they're looking to spend quite a bit of money doing that and you know in some ways some of the the questions that they ask and and again I'm not trying to paint with really Broad strokes but some of the questions I got from some of these people who revealed to me that they were immigrants they're different questions than what I'm getting from from some others and so it's Unique they're bringing a different perspective they're bringing a different energy they're brings you know obviously money into the fora and so I think that's exciting personally I like to see that I like to see a lot of people from a lot of different backgrounds entering the markets and and and doing real estate transaction and so there's not a clear there's not a single profile that you can put all these investors under there is a great amount of diversity in the real estate investor World here's another takeaway that that I had from it and and this one is a bit different than the others but accountant being behind right now is majorly complicating the process of people people doing these big transactions on like multiple fronts so there are a lot of accountants right now that they've just gotten crushed by by covid by all the different stimulus things that the government has done the the PPP loan which now you know there's another deadline for that you know all this unemployment and there's just so many different things that accountants have had to do the past year to year and a half that they've never had to do before and it it's putting them in a bind and so they're having to stretch themselves really thin and cut the cut the fat out of what they're doing and then a lot of cases what I'm hearing over and over again is that their accountants people's a lot of people's accountants have not you know completed their 2020 taxes yet they've had to extend that out they've not completed their 2020 bookkeeping yet and and you know there are other things as well that that aren't being done in the normal timely manner and that's a challenge that's a challenge with people trying to get financing on a on a bigger package like this a lot of banks they want to see those 2020 tax returns it's a challenge for those that well in the case of of some of these condos that were being sold I didn't have all of the records firmed up it was hard for me to get because like I mentioned before there were multiple sellers involved with this it was hard for me to get all of the records all the financial records from some of them because some of them still didn't have their things from their accountants from from 2020 and so this is a major challenge right now and I think that U my suspicion is that we're going to continue to see this for the next little bit at least and that it's going to make it make it challenging for people to to purchase these types of of property types of packages as well as the people purchasing them are probably going to have to to be in the dark a little bit in terms of what they're actually purchasing because they might not have all the p&l statements they might not have all of the financial records another takeaway that I had and and again I keep saying this this was not a surprise it was just a reinforcement many of the agents and I'm not trying to bash other agents out there I I fully understand that I posted this in the MLS so so this was blasted out to a lot of residential Realtors and and some of them were polite enough to admit that they had never done dealt with anything like this and it was a little bit outside their wheelhouse nonetheless many agents that I communicated with I could immediately tell they did not know what questions to ask and I could immediately tell which ones did know what questions to ask it's it's very you can assess that if you if you're in this investment World which I am again I'm not a commercial agent but I have kind of a toe dipped in the in the commercial multif family business just by virtue of the fact that I've done several smaller multif family deals and and I'm educated enough on the larger ones as well to educated enough to be dangerous on it at least it doesn't take me long to to be able to identify okay this this person has no idea what he or she is talking about they don't know what question to ask they don't know how to represent their client blah blah blah they're they're in over their heads and on the flip side there were some that they immediately dove into you know you you can tell by the abbreviations you know they they start throwing all these different abbreviations at you well do you have this you know do I need to sign an Loi and how many pnls do you have and and do you have this document that document you know and and and those are just basic examples obviously but those are the ones that you know when it when they're speaking the language naturally it's like okay they get it they they know exactly what they're looking for and they are going about it the right way they're representing their client well and I the way I approached this I had all the information kind of teed up and ready to go but because there's a lot of like delicate Financial information that you know is is being revealed as things get get you know divied out to different people I was not just putting that on display for everyone if I if someone asked me for information then I had the ability to provide it my clients gave me that ability to to provide that information to to people that were trustworthy that I could provide it to and and again because this wasn't this is a unique deal we weren't doing Lois and all of that but nonetheless I approached it from hey part of the evaluation process as I was listening to these people talking to me part of the evaluation process for me as a realtor for me to go present to my clients hey here is the type of buyer that I think we're dealing with here I wanted to hear what questions those those agents were asking me that helped me to understand better the heads space of the buyer better the heads space of the agent to better understand what type type of a transaction this is going to be is this going to be the type of transaction where they're going to want to do a tremendous amount of due diligence have a gazillion inspections done you know if that's the case this isn't really a great property to to be having a gazilion inspections done I mean we got 14 out of the 15 units occupied how are we going to you know how are we going to disrupt the tenants multiple times over a multi-week period um and and at the end of the day a big factor for the one that we ended up selecting was that they seemed a lot more interested in the financials and whatnot that that we did provide upfront versus getting into all of all of the Weeds on like okay we need a a month-long due diligence period and and all these different things the the vibe that I got and that I let my clients know at the end of the day they have to make the decision was okay this this seems like someone that understands what they're doing they understand that that the finances work and that doing you know a ridiculous due diligence period really isn't necessary at the end of the day because they're looking at it more from a numbers perspective than needing to get into the Weeds on like you know is there a leaky faucet in in some of these is there you know is there a tenant that has an extra person staying in his or her unit that we didn't know about you know they're they weren't interested in that they were looking at it more from a money perspective and that was the type of client that we were hoping to get that was the type of buyer we were hoping to get and I think we I think we got it at the end of the day but you can assess that and I was able to assess that in the moment gauging the questions and gauging the types of of reactions that I was getting as people were contacting me so a very unique experience I don't know if I'll ever do something like this again I I hope I do because I've enjoyed it I think it was a fun experience it was it was very demanding we we went about this the right way you know doing it as more of a residential deal we had sellers disclosures and whatnot on every single unit I had a lot of paperwork to do a tremendous amount of paperwork in order to to get this to be MLS compliant and in order to get this you know to to be compliant with C Dan jiner my my firm that I'm currently with and all of that it was a lot of work but it's been worth it and hopefully at some point here in the future I will be able to do something else like this because I can see now there is a massive Market out there that's just salivating over this type of deal and a lot of times these types of deals go off Market and I think I have now been able to demonstrate that there's a way that you can go about it by doing it on Market as well that that that that can be a good way to go about it that it doesn't merely have to be an off-market type of transaction so if you're looking at selling off a package of units single family condos multif family whatever it is let me know I'll be honest with you if I think I can help you or not I'll be honest with you if if the types of of prices that you're looking to get if if those are realistic or not that's just I'm a straight shooter but I'd love the opportunity to at least talk to you about it and if you have any other questions all my contact information and the show notes as always please leave the show a rating and a review and I hope you guys have some happy investing yourself and a good rest of the week [Music]