Purchasing a BETTER property at a BETTER price SOONER depends on the number of real estate opportunities you have to choose from and your broker’s ability to help you buy property you ordinarily would not financially be able to.
Here’s what my buyer strategies can do for you:
For more information on the advantages of a direct (vs. delayed) exchange and for an explanation of these exchanges, please see DIRECT VS. DELAYED EXCHANGE below.
AVAILABLE REAL ESTATE OPPORTUNITIES NOT CURRENTLY BEING MARKETED
I know of real estate opportunities not currently being marketed. They come to my attention as a result of the following: 1) Researching expired MLS listings, For Sale-By-Owners and foreclosures; 2) Mailing thousands of post cards to property owners; 3) Marketing my listings “For Sale or Exchange”; 4) Referrals and 5) Networking at my Investment Real Estate Analysis Courses. I’ve been a member of the Chico MLS for over 24 years.
Those not actively being marketed are sometimes the best opportunities,
because there is little or no competition from other buyers. I can provide
you information on these unlisted properties only after the seller or
you protect me, in writing, on the fee. If you wait for the sellers to
protect me, you’ll lose out on most, if not all, of these opportunities.
HELPS YOU BUY PROPERTY YOU MAY NOT ORDINARILY BE ABLE TO
Some buyers have sufficient credit and income to qualify for a loan but can’t get the loan because they are short on CASH for the down payment. The down payment is more of a problem when lenders require even larger CASH down payments of non-owner-occupied buyers (investors). Then there are buyers who have plenty of cash, income and good credit but will not buy a property unless they can use their non-cash property. If you are one of these cash-conserving or cash-poor buyers with lesser property for the down payment and the owner of the property you wish to acquire does not find your property acceptable, I’ll consider buying yours so you can acquire theirs. This strategy can be the KEY to buying a BETTER property at a BETTER price SOONER.
I cannot count the number of times buyers have told me they found very desirable properties while working with other brokers, but were not able to purchase them because buyers could not sell their properties in time and sellers would not take them in exchange. Because I would have purchased many of those buyer properties, I would have helped many buyers acquire properties they ordinarily would not be able to.
Or if they find yours acceptable but you do not find theirs acceptable, I’ll consider buying theirs so they can buy yours, allowing you to deposit your sale proceeds into your account or with an intermediary for a delayed tax-deferred exchange. I have taken equity in property for the fee in the past, and under reasonable conditions, will again. I have excellent credit and will add cash if I think the deal justifies it.
Usually I’ll consider buying only the lesser property in an exchange if I’m paid 6% on the higher valued property, and sometimes also on the lesser valued property, especially if it’s vacant land or other negative cash flow or risky property. In other words, I’ll consider buying your property if you acquire property of greater value, the owner of which pays me a 6% fee. Some will gladly pay 6% to sell their property. If you’re happy with your purchase price, the fee the other party pays should be of no concern to you. NOTHING VENTURED, NOTHING GAINED!
Because TIME IS OF THE ESSENCE when buying or exchanging into real estate, and non-cash property is almost always MUCH LESS DESIRABLE than CASH, my willingness to take equity in certain property for fee can be VERY ADVANTAGEOUS.
My goal would be to find as many desirable properties (e.g. moneymakers) for you as possible, regardless of whether the sellers will take your property in exchange. Because of three-way exchanges and my willingness to take equity in certain property for the fee, it’s more important to find the BEST property at the BEST price SOONER than for seller to take your property. In the last 24 years, I have helped dozens of clients complete exchanges to defer capital gain tax and/or achieve other financial objectives.
For purposes of finding the best deal for you, perhaps we should not consider me a buyer for YOUR (vs. their) property until I sufficiently market it (test market) or I find you desirable property owned by someone not willing to take your property.
Of course, completion of your transaction may be subject to your tax
professional’s and attorney’s approvals. I’m not a qualified
tax professional. Do not rely on my tax advice; please see your tax professional.
Even though I’ll be the only person making my buying decisions,
my receipt of equity in property as the fee will be subject to your approval.
USE DIRECT-MAIL TARGET MARKETING THAT PRODUCES
This DIRECT-MAIL TARGET MARKETING will involve hundreds (and perhaps thousands) of fliers. Most of those receiving my fliers will not be marketing their properties, actively reading classifieds or monitoring the MLS or the Internet. Since my attention-getting flier promoting your cash and/or property will be mailed first class, it’s certain to catch their eyes, causing most of them to read it and consider selling you their property. Those not interested often mail or fax copies of my fliers to friends and colleagues. Even though it’s expensive, my direct-mail target marketing will produce EXTRA property for you to buy or exchange into, NONE OF WHICH WOULD HAVE EXISTED WITHOUT IT.
If you have Chico or other Butte County property “For Sale or Exchange,”
please go to my Marketing Hard to Beat webpage (www.davidhector.com/marketing.htm)
for a long list of marketing strategies that will make
your property dramatically more marketable, produce more and better offers,
turn more prospects into buyers and save you time, money and grief—selling
your property for a HIGHER PRICE SOONER while costing you less. After
reading my Marketing: Hard to Beat webpage, please judge for yourself.
Do you, or anyone you know, own property LOCATED OUTSIDE
Butte County you or they would exchange for acceptable Chico or other
Butte County property? If so, please read Out-of-town Exchange Program
and call me.
Imagine the SYNERGISM created by all these strategies! Because of my direct-mail target marketing, involvement in the market, ingenuity and your willingness to protect me (if needed), MORE and BETTER properties will be presented to you SOONER. Because of my problem-solving abilities, inventive skill (know-how) and willingness to take equity in certain property for fee, you’ll BE ABLE to acquire properties you ordinarily would not be able to. These strategies will dramatically improve your chances of buying BETTER property at a BETTER price SOONER involving less of your time, money, grief and risk.
DIRECT VS. DELAYED EXCHANGE
You can accomplish an I.R.C. 1031 tax-deferred exchange by a direct, delayed, reverse or construction exchange. Only direct and delayed exchanges will be discussed.
Whether for a 1031 tax-deferred exchange or to achieve other objectives, a DIRECT exchange occurs when two property owners take each other’s property with both escrows closing simultaneously. If I purchase one of the two properties and both escrows close simultaneously, it’s still considered a direct exchange. My direct-mail target marketing, inventive skill (know-how) and willingness to take equity in certain property for the fee can easily overcome the difficulty of completing an acceptable DIRECT exchange. Without these marketing strategies, it would be very difficult, if not impossible, to exchange your property DIRECTLY for acceptable property.
Using independent appraisals for both exchange values simplifies a DIRECT exchange. If bank loans are required, appraisals will apply. A direct exchange is basically the balancing and then exchanging of equities (exchange value less loan balance = equity).
A DELAYED exchange requires you to close escrow on your property and then locate and purchase replacement property. A DELAYED 1031 tax-deferred exchange involves closing escrow on your property, depositing sale proceeds with an intermediary and paying their fees, identifying certain number or amount of replacement property within 45 days and closing escrow on replacement property within 180 days. Failure to properly identify and close escrow may result in you owing the IRS a substantial amount. Because of time pressures to complete a delayed 1031 tax-deferred exchange, some are forced to buy property and/or pay prices they ordinarily would not.
In addition to deferring capital gains tax, a direct or delayed exchange can help you achieve other financial objectives. Through an exchange you can, for example,
A direct and delayed exchange may achieve your financial goals even if deferring taxes is not one of them. And if you have no interest in taking a non-cash property in exchange, a DIRECT exchange could still produce your BEST buyer. In other words, if I buy property offered you in direct exchange for your property, you receive a SALE, enabling you to deposit your sale proceeds into your personal account or with an intermediary for your delayed tax-deferred exchange. Using marketing that produces direct exchange offers means more offers—opportunities—for you to choose from. Only you will decide on the BEST offer.
The advantages of a DIRECT exchange include the following:
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