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
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