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Most people know that buying real estate as an investment is a viable way to plan for the future, but many are unaware of how to undertake defensive real estate strategizing to get the most out of their investment, especially when it’s time to turn the property over to their heirs or transfer their investment to another property. René Nelson with Pacwest Commercial Real Estate and Bob Nelson with Pacwest Real Estate Investments discuss the details here.
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Hi, I’m René Nelson with Pacwest Commercial Real Estate. I’m a CCIM member and also have the designation CRE, which stands for Counselor of Real Estate.
I’m Bob Nelson and I’m also a CCIM by professional designation and also a counselor of real estate, which by the way is the highest professional designation you can earn in real estate. We have two different companies. Pacwest Commercial Real Estate is René’s. Mine is Pacwest Real Estate Investments and we specialize in investment real estate, but a little different slant to it. What do you do young lady?
Defensive Real Estate Strategies and Ideas to Maximize Client Portfolios
René Nelson: My preferred form is to sell multi-family, as well as triple net. But really what I’m finding right now is that my clients need strategies and ideas on how to maximize their portfolio, what do they do with their real estate? A lot of my clients have worked their portfolios about as hard as they can in multi-family, and they know that it’s probably a good time to transition. They’re not sure when to do it and they’re not sure how to do it, so let’s talk a little bit about the strategies.
Bob Nelson: Well, that’s exactly what we specialize in. It’s understanding a client’s needs, what capacity they have in order to change their position, and then allowing us to relate that in terms of investment benefits, identifying then the properties that would produce that level of benefit, and then moving them from where they are into where they would like to be, and doing it in a seamless manner so as to defer the capital gains tax, utilizing a 1031 exchange. It’s an interesting process.
In today’s market, we’ve had a tremendous run, a tremendous string of positive value growth in real estate and now people are thinking, “I’d like to lockup some of that wealth in case the market was to turn or I’m just simply tired of an apartment complex, which has tenants, trash, turnover, etc. I would like to go into something that’s a little more no-brainer.” Again, this is defensive thinking. How do I preserve my net worth, but still allow it to grow at a reasonable rate, a safe rate, so that I could pass it to heirs, or I could utilize the free time that I’m freeing up from the ownership and management aspect to travel, to enjoy life a little bit more.
René Nelson: Absolutely.
Bob Nelson: Some of our clients are getting a little long in the tooth. They look at me, they can relate to that. It’s a process of us identifying a defensive strategy, not just an offensive strategy and going out and accomplishing the end that they’re after in the next holding period.
René Nelson: Absolutely. One thing that I see for a lot of my clients is they’re trying to figure that exit strategy and what the timing on that looks like.
Bob Nelson: Now, when you say exit strategy, you’re saying going out of what they own into maybe a different form or format?
René Nelson: Absolutely.
Bob Nelson: Okay.
René Nelson: One of the keys is how do they do that without having to pay the tax or how do they do that with the maximum rate of return. In the next video, I’d like to talk with you about that, on how do you 1031, do a tax-deferred 1031 exchange.
Bob Nelson: Okay.
René Nelson: Also, in your eyes, what’s the best way for, maybe, a multi-family owner to maximize their net operating income before they get ready to sell?
Bob Nelson: Okay. That makes sense. Thank you for being with us.
When you have questions about real estate strategizing, consult with experts like René Nelson with Pacwest Commercial Real Estate and Bob Nelson with Pacwest Real Estate Investments to make the best plan for your financial future. Contact René Nelson at 541-912-6583.
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