The Wait and See Attitude

The final podcast in the changes in real estate series is here!

Today we wrap up the Legislative Changes in Real Estate series with a discussion of the “wait and see” attitude in investment real estate. Let’s take a look!

René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker

Legislative Changes in Real Estate – Part 9

René Nelson: Marcia, let’s talk about the concept of “wait and see.” Because we both deal with people that have that attitude. What’s your thoughts on “wait and see” in the residential world?

Marcia Edwards: Well, it’s kind of fascinating, you wonder what they’re waiting to see the doomsday or the miracle pricing. And somewhere in between is probably where it will be at all times. What you really gotta do is take a look at what you need for your personal needs long term and decide when it’s urgent to you.

René Nelson: I think for people that own investment property, a lot of people think, “Well, I don’t know what I would 1031 exchange into. I’m going to wait, I don’t know what I want to do.” Well, folks, I hate to tell you this, but if President Biden’s plan goes into effect, if you sell and decide, “I’m not going to replace that property.” Your tax just went up by another. It doubled, now you’re at 40% for capital gains, you can’t afford to wait. You have to come up with a plan.

Marcia Edwards: I wish we could create urgency and help people understand the magnitude of the difference of a situation, especially investment real estate. We all sit and don’t go and look at it often enough, don’t review our portfolio or our values enough. I think that’s an urgent matter, and it’s maybe as soon as 2022 that that would flip on people. Right?

René Nelson: Yeah, they’re talking about December 31st, that January 1st, that new capital gains will become law. So for serious investors who are trying to really come up with a plan, I recommend that you get a pinpoint price evaluation on your property so you can figure out what’s your value in today’s market and what could you do with that if you wanted to 1031 exchange it.

Duplexes are few and far between, but Marcia and I both know that they’re out there, she can find them, it just takes a little bit of time. So it goes back to that plan, you can’t just think, “Oh, I’m just going to pull this off in 30 days.” No, it takes a couple of months to find the right duplex right now.

René Nelson: It’s possible and it’s doable, so if you have an older property, lots of deferred maintenance, people will buy that. Marcia has a list of builders and contractors that are looking for value-add opportunities, so don’t drag your feet, don’t tell yourself, “Oh, I’m going to do a weekend warrior project and go in and fix it up.” Because if you’ve got tenants involved, it’s a lot of time, it’s a lot of effort, and you might be better off to just give that problem to a different person.

Marcia Edwards: I would encourage you to have the conversation now with the realtor, with René for multi-family, with me if it’s a single family, and take a look at it. It’s not going to cost you anything. It will cost you a lot if you don’t.

If you’d like help understanding the true income value of a property that you’re interested in investing in, schedule a 15-minute discovery call with expert René Nelson today.