grandfather passed away, left me some real estate in will(need advice)

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Atheus

Diamond Member
Jun 7, 2005
7,313
2
0
Originally posted by: Tizyler
Sounds like big trouble. You're going to need plenty of legal advice before this thing is over. As your attorney, I advise you to rent a very fast car with no top. And you'll need the cocaine. Tape recorder for special messages. Acapulco shirts. Get the hell out of L.A. for at least 48 hours.

:thumbsup::thumbsup::thumbsup:
 

Sphexi

Diamond Member
Feb 22, 2005
7,280
0
0
Originally posted by: nweaver
Originally posted by: DBL
My condolences.

Has anybody considered the tax implications of this? The OP, if he wants to hold on to this, just inherited millions of $. I'm guessing he would be on the hook for a pretty substantial tax bill unless his GF prepared for this well. Sounds like he knew what he was doing though.

I thought about this, but even if he owes taxes on it, he can EASILY mortgage just one of the building to pay the taxes, and have it payed off in less then 10 years.

Pretty much. The lawyer will let him know how much the taxes are probably going to be, then it'll be up to OP to find an accountant/tax specialist, and decide if it's cheaper to mortgage one of the properties and pay the taxes, and use the rest of the cash for potential expenses/repairs that'll have to be done this year...or to take out a loan for the same reasons, just a smaller amount than the full mortgage. No matter what this is going to take a couple of weeks to figure out fully, between the lawyer, an accountant, a property management company, and the OP. Still, it's a once in a lifetime opportunity, pass it up and you'll never have another chance like this.


BTW, has anyone even thought of what kind of high end clients are going to be paying 4500+ a month for an apartment in this part of town? We're talking aspiring actresses and models here, who haven't quite yet made it yet, so they'll be desperate for attention from any guy that seems to have money, like the owner of their building ;)
 

xgsound

Golden Member
Jan 22, 2002
1,374
8
81
The tax implications will probably determine if or how you can keep all the properties. The lawyer should have many suggestions as to how to proceed. It will be a full time job to oversee these assets and learn at the same time. Be cautious now when someone wants power of attorney that it only applies to the job at hand.

Assuming you keep them and your Grandfather had no management companies, I would get 3 different ("a man should know his limitations") management companies, one for each building. As time moves on and you learn more, begin to be more "hands on" with the least performing company until you think it's time to replace them or step in yourself. If they all do well, accept yes for the answer and keep them all. If your Grandfather has records of who he dealt with for contractors, finances, advertising, and so on, get copies of those records.

You'll have your hands full with the attorney, accountant, and checking on the management companies. They're all only human so check often and be prepared to change them as necessary.


Jim
 

jpeyton

Moderator in SFF, Notebooks, Pre-Built/Barebones
Moderator
Aug 23, 2003
25,375
142
116
Asking ATOT for advice instead of consulting a lawyer?

I hope that was your first (and last) mistake regarding this situation, but I doubt it.
 

DBL

Platinum Member
Mar 23, 2001
2,637
0
0
Originally posted by: nweaver
Originally posted by: DBL
My condolences.

Has anybody considered the tax implications of this? The OP, if he wants to hold on to this, just inherited millions of $. I'm guessing he would be on the hook for a pretty substantial tax bill unless his GF prepared for this well. Sounds like he knew what he was doing though.

I thought about this, but even if he owes taxes on it, he can EASILY mortgage just one of the building to pay the taxes, and have it payed off in less then 10 years.

Obviously. This is a good problem to have. But it is more complicated than sitting back and collecting 3/4 of a million every month.
 

GuitarDaddy

Lifer
Nov 9, 2004
11,465
1
0
Sorry to hear about your loss:(

Stick close to the lawyer and a good accountant. Estate taxes will be a real bitch in this situation. As others have said you will likely have to mortgage or sell some of the property to deal with the taxes. Estate taxes will be owed on the total value of the properties minus the $2mil exemption, and the estate tax rate maxes at 46%. As an example if the properties are valued at $30mil the tax would roughly be 30-2=28mil x .46 = 12.9mil:Q
And that assumes you will get the benifiet of the entire exemption, which probably won't happen as you mentioned he had seven complexes which indicates at least one other benificiary and the exemption applies to the entire estate not each benificiary.

Estate and gift taxes are scheduled to be repealed in 2010-11 (believe it when I see it)
but that will obviously not help you in your situation
 

z0mb13

Lifer
May 19, 2002
18,106
1
76
Ok like already mentioned tons of times, first thing OP needs to do is to hire these people: lawyer, tax consultant, and a real estate management company.

the RE management company will give you options, ie how much money you can get if you decide to keep it, and how much money you'll get if you decide to sell it

People that say that selling it is a very bad idea is not true at all. When people sell commercial properties (like the op just inherited) there are metrics that they calculate, including future appreciation and a metric like rate of return (I forgot what the lingo is) to calculate pretty much the rate of return of the commercial properties. It is for the OP to decide if he prefers to sell it now (and use the money for other investments) or to just simply enjoy the cashflow.

Also some properties in the LA area is still under rent control. So there might still be tenants living in ur property that pay 600 a month or less for their places. Look at the books, check on this. A good RE company should be able to tell you what to do.

Sorry for your loss, but right now you are a lucky SOB in my book :p
 

DaShen

Lifer
Dec 1, 2000
10,710
1
0
Originally posted by: sygyzy
I would seriously think about running them or hiring property managers to run them. Think about this, you can learn about business, people skills, plus have serious cash flow for the rest of your life. Alternatively, you can sell them all, pocket millions, and then very likely blow it on stupid things. Do you think you have the self-discipline to get all that kind of money at once? You should be very thankful, your grandpa just basically secured you for life.

I agree hear.
 

zinfamous

No Lifer
Jul 12, 2006
111,125
30,076
146
Originally posted by: Sphexi
Originally posted by: nweaver
Originally posted by: DBL
My condolences.

Has anybody considered the tax implications of this? The OP, if he wants to hold on to this, just inherited millions of $. I'm guessing he would be on the hook for a pretty substantial tax bill unless his GF prepared for this well. Sounds like he knew what he was doing though.

I thought about this, but even if he owes taxes on it, he can EASILY mortgage just one of the building to pay the taxes, and have it payed off in less then 10 years.

Pretty much. The lawyer will let him know how much the taxes are probably going to be, then it'll be up to OP to find an accountant/tax specialist, and decide if it's cheaper to mortgage one of the properties and pay the taxes, and use the rest of the cash for potential expenses/repairs that'll have to be done this year...or to take out a loan for the same reasons, just a smaller amount than the full mortgage. No matter what this is going to take a couple of weeks to figure out fully, between the lawyer, an accountant, a property management company, and the OP. Still, it's a once in a lifetime opportunity, pass it up and you'll never have another chance like this.


BTW, has anyone even thought of what kind of high end clients are going to be paying 4500+ a month for an apartment in this part of town? We're talking aspiring actresses and models here, who haven't quite yet made it yet, so they'll be desperate for attention from any guy that seems to have money, like the owner of their building ;)

It's good to be the king... :)
 

JS80

Lifer
Oct 24, 2005
26,271
7
81
Lever up and buy more properties with the equity, rinse, repeat.

I have a few friends who's family owns property in BH, WeHo, and CC. PM me if you need some contacts. They are also 25 years old. My good friend actually manages the apartment complexes himself, maybe he can offer you some advice.
 

skyking

Lifer
Nov 21, 2001
22,376
5,337
146
Mark, I'm sorry for the loss of your grandfather.
I do have some experience with property management. In my younger years, I had a good friend who had his own apartments and houses and managed a few dozen various properties for others. I helped him and learned the tricks of the trade.
At that place and time, the going rate for management was 10%. I have no idea what the current rate is in that part of the country.
Do take your time finding the right management company; a bad one could really ruin the property and your pocketbook. I'd suggest listening to your grandfather's attorney, and then find an attorney of your own who specializes in real estate.

 

Jadow

Diamond Member
Feb 12, 2003
5,962
2
0
Sorry to hear about your Grandpa. He left you a gigantic inheritance. If you don't feel you can manage them, sell them before they become a problem. With the money you make, you will be able to do a lot of great things.
 

richardycc

Diamond Member
Apr 29, 2001
5,719
1
81
if I were you, I'd sell one of the worst shape units out of the 3, for paying taxes, etc... and take up landlord 101.
 

everman

Lifer
Nov 5, 2002
11,288
1
0
Assuming anything is left after all estate taxes are paid and the whole probate process is finished, learn how to become a slumlord...er landlord. ;) Get a good management team together and you'll have some nice steady cash flow.
 

DainBramaged

Lifer
Jun 19, 2003
23,448
40
91
Damn, I'd just about kill to have that kind of opportunity. I'd love to learn about how to run something like that. Even if I had to hire someone to do it, I'd learn so much from him or her.
 

kevman

Diamond Member
Apr 20, 2001
3,548
1
81
Keep em, hire a property manager to run them for you. It will only help you to own this in the future.
 

johnjbruin

Diamond Member
Jul 17, 2001
4,401
1
0
Sorry about your grandfather...

One advice: DO NOT SELL THEM. No matter what anybody tells you.

option 1: quit your job and run them - if they are fully paid you will make a shitload of money
option 2: keep your job as a safety net - hire some managers and run them and still make a shitload of money

This is almost the same as hitting a lottery.
 

sheemone00

Senior member
Sep 17, 2003
209
0
0
I'm sorry for your loss.

As for the property your grandfather left you, you just got set up for the rest of your life. I would recommend learning how to manage these apartments if you're up for it. After you learn the ropes you can just manage these apartments (or hire someone else to do it for you) and you can just live off of the income from these Beverly Hills apts.
 

tyler811

Diamond Member
Jan 27, 2002
5,385
0
71
Originally posted by: sygyzy
I would seriously think about running them or hiring property managers to run them. Think about this, you can learn about business, people skills, plus have serious cash flow for the rest of your life. Alternatively, you can sell them all, pocket millions, and then very likely blow it on stupid things. Do you think you have the self-discipline to get all that kind of money at once? You should be very thankful, your grandpa just basically secured you for life.

:thumbsup: