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grandfather passed away, left me some real estate in will(need advice)
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Sphexi
Diamond Member
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
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
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
GuitarDaddy
Lifer
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
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
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 😛
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 😛
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.
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
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.
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.
sniperruff
Lifer
i'd hire someone to manage them.
richardycc
Diamond Member
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.
ViviTheMage
Lifer
get off ATOT and talk to the lawyer, hire someone to run it, bingo cashola.
DainBramaged
Lifer
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.
johnjbruin
Diamond Member
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.
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
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.
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.
SSSnail
Lifer
Don't you hate it when people bump dead threads?
I nominate this for shens of the year thread too.
http://forums.anandtech.com/me...=2101005&enterthread=y
Edit: credit is to credits due, thanks KLin.
I nominate this for shens of the year thread too.
http://forums.anandtech.com/me...=2101005&enterthread=y
Edit: credit is to credits due, thanks KLin.
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