I love to empower investors to see their options and increase their financial freedom. Due to the impact of Oregon Senate Bill 608, many investors in Lane County, Oregon, may now want to use a 1031 exchange to make a switch from multifamily properties into commercial properties. Let’s look at some examples to illuminate the possibilities.
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I’m analyzing a portfolio for this client right now. She has multiple duplexes and single-family properties spread out in Eugene. The price is where I have calculated the value of her property when we list them. The list price is $1.3 million, and her net income, after operating expenses, is approximately $58,000.
1031 Exchange from Multifamily to Commercial
If we sell her portfolio at $1.3 million, less the sales, cost of commission, title insurance, escrow fees, the fees associated with selling that, she should net right at $1.2 million. This is what it’ll look like. Now remember, her net income is $58,000 and she should have roughly $1.2 million coming out of that portfolio that’s free and clear. Here are three examples of property that are listed and active on the market in the Eugene-Springfield market.
There’s a property in Springfield at $1.4 million. The net operating income (NOI) on this property is $114,000. You can see she can take her portfolio of duplexes and single-family properties and do a 1031 exchange, then pass those funds forward into this property. Yes, she is going to have to take on little bit of debt, but she’s now out of rent control and she’s out of having to deal with tenants, toilets, and trash. That’s an example right here in the Eugene market.
“No investor should have to roll the dice on their financial freedom!™” When you are considering your options, get an expert on your team: René Nelson, CCIM, (541) 912-6583.
If you want more information about Oregon Rent Control SB 608, visit Pacwest Commercial Real Estate’s Oregon Rent Control Central for the latest information.
Disclaimer
Due to the complex nature of these changes, Landlords should contact an attorney with any questions or clarification of Oregon Rent Control SB 608.
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