Capital Gains Taxes for Multifamily and Commercial Real Estate Investors

Capital Gains Taxes for Multifamily and Commercial Real Estate Investors

When it comes to investing in multifamily or commercial real estate, having an effective tax strategy is critical to your success. Otherwise, you could see a large portion of your profits consumed by an outsized tax bill. Of all the taxes an investor may need to pay as a result of their investment, none is more important than capital gains tax.

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CMBS B-Pieces and The Multifamily and Commercial Lending Market

CMBS B-Pieces and The Multifamily and Commercial Lending Market

CMBS loans are among the most popular types of financing for multifamily and commercial real estate, with approximately $77 billion in CMBS financing issued in 2018 alone. As many already know, CMBS loans are designed for securitization, meaning that one borrower’s loan will generally be grouped with many others to generate a commercial mortgage-backed security, which is then sold to investors on the secondary market.

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Master Servicers for CMBS Loans: What Borrowers Need to Know

Master Servicers for CMBS Loans: What Borrowers Need to Know

Unlike a traditional bank or credit union loan, a CMBS loan is not serviced by the lender that originated the loan. A third-party loan servicing firm, known as a master servicer, will typically take on this responsibility.

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Special Servicers for CMBS Loans

Special Servicers for CMBS Loans

One potential downside to CMBS is that these loans are not serviced by the lender that originated them, and are typically placed under the supervision of separate loan servicing company referred to as master servicer. But what if things go south and a borrower defaults on their loan? That’s when another company, called a special servicer, comes in.  

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Association Profile: Apartment Association of Orange County

Association Profile: Apartment Association of Orange County

The Apartment Association of Orange County (AAOC) is one of the largest apartment associations in the Southern California area. It is an affiliate of the National Apartment Association (NAA), as well as an affiliate of the California Rental Housing Association (CalRHA). Just like most apartment and landlord associations, The Apartment Association of Orange County provides members access to a variety of discounted landlord services, the ability to attend networking and educational events, easy access to forms, and certain other benefits.

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How Property Management Fees Work for Commercial and Multifamily Properties

How Property Management Fees Work for Commercial and Multifamily Properties

In general, commercial and multifamily property management fees will range between 4-12% of the property’s overall rent. However, in some situations, these numbers may go as low as 3% and as high as 15%. In other cases, especially when a building is very large, a company may charge one flat, monthly fee.

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Association Profile: Apartment Owners Association of California, Inc.

Association Profile: Apartment Owners Association of California, Inc.

The Apartment Owners Association of California, Inc. (AOA) is one of the larger apartment associations in California. The organization was created in 1982 by Daniel C. Faller, who currently serves as the president of the AOA. Like many apartment associations, it offers members access to educational resources and seminars, business consultations, forms, and a variety of discounted landlord services.

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Association Profile: California Apartment Association

Association Profile: California Apartment Association

The California Apartment Association, or CAA, is the largest apartment association in the state of California, as well as the largest state apartment association in the United States. The CAA provides a variety of benefits to members, including classes, events, and discounts on important services. It also advocates for political change on behalf of California’s apartment industry, both through direct outreach to legislators and via its political action committee (CAAPAC).

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Association Profile: The Apartment Association of Greater Los Angeles

Association Profile: The Apartment Association of Greater Los Angeles

The Apartment Association Of Greater Los Angeles (AAGLA) is one of the largest apartment associations in Southern California. It is also one of the largest local affiliates of the National Apartment Association (NAA). The AAGLA, which has operated since 1917, is designed to help multifamily investors, developers, property managers, and other members of the apartment industry by providing networking, educational opportunities, and discounted landlord services as well as politically advocating on behalf of the local and national apartment industry.

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LURAs: Land Use Restrictive Agreements and the LIHTC Program

LURAs: Land Use Restrictive Agreements and the LIHTC Program

If you’re a multifamily investor/developer interested in using Low Income Housing Tax Credits (LIHTCs) to fund the construction or rehabilitation of a multifamily property, you will need to agree to limit rents for a certain period of time, as well as to abide by other restrictions. All of these stipulations will be put forth in a contract called a Land Use Restrictive Agreement, or LURA.

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What is Defeasance and How Does it Work?

What is Defeasance and How Does it Work?

Defeasance refers to the replacement of the collateral of a loan with securities (generally fixed-rate government bonds) that will offer a lender an equivalent return. In many cases, borrowers will need to purchase U.S. Treasury bonds to conduct defeasance, though other types of government-backed securities may be used in some scenarios.

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What Are The ADA Requirements for Multifamily Properties?

What Are The ADA Requirements for Multifamily Properties?

For multifamily investors and developers, it's essential to know what ADA rules may apply to their property. That way, they can steer clear of potential lawsuits and fines. Despite widespread knowledge that the Act exists, many people misunderstand the exact ways in which these regulations apply to the average multifamily property. 

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What is Corporate Housing?

What is Corporate Housing?

Corporate housing generally refers to the practice of renting an apartment or home to corporate workers or executives on a medium-term basis. Therefore, owning corporate housing lies somewhere between operating an extended-stay hotel and leasing out apartment units for a traditional 6-month or 1-year period. In this article, we'll explore whether corporate housing is a viable alternative source of income for multifamily investors, but first, we'll review a few facts about the corporate housing industry.

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Apartment Lender Inspections: What Borrowers Need to Know

Apartment Lender Inspections: What Borrowers Need to Know

If you own a multifamily property that’s slated for an upcoming lender inspection, you might be wondering what to expect— and you may even be anxious that you might fail. Fortunately, lender inspections aren’t rocket science, and, if you’re reasonably prepared, they can often go off without a hitch. In this article, we’ll tell you exactly what to expect from a lender inspection and how to effectively prepare for one. 

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Multifamily Utility Considerations for Investors

Multifamily Utility Considerations for Investors

Utilities; they may not be the sexiest part of your multifamily investing strategy-- but if you’re not thinking about them at all, you could be losing out on serious cash. That’s especially the case if you currently own an older property without submetering and/or if you currently include utilities in the price of your tenants’ rent.

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How to Find Apartment Complexes for Sale

How to Find Apartment Complexes for Sale

If you’re reading this article, you probably already know that multifamily investing is an incredible way to build long-term wealth. In fact, there’s a good chance you already own one or more multifamily properties of your own. However, you’re might be struggling when it comes to finding your next investment property. Fortunately, we’ve put together this quick (yet comprehensive) guide to help you find the best property for your individual needs. 

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Due Diligence for Apartment Investing

Due Diligence for Apartment Investing

Before you make the leap and purchase a multifamily property, you’ll need to do some homework first. In multifamily industry, this is referred to as “due diligence,” and often consists of hiring third-party service providers to inspect and/or provide reports on various parts of the property to analyze its suitability as an investment. 

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Non-Recourse Loans

Non-Recourse Loans
A non-recourse loan on a commercial or multifamily property is a loan that does not require the personal guarantee of the borrower(s). To put it simply this increases investors/lender risk and reduces risk/liability to borrower(s).
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Loan Ratios in Multifamily and Commercial Real Estate

Loan Ratios in Multifamily and Commercial Real Estate
So don't get too excited if your loan amount based on your LTC or your LTV looks above and beyond what you expected, because you are going to get the lesser of the two, and quite often the lesser of three or four ratios. Lenders are experts in risk mitigation, and that means they know how to manage leverage and loan amounts. 
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Do You Need a Business Plan for Apartment Investing?

Do You Need a Business Plan for Apartment Investing?

While to some, apartment investing may sound like a passive hobby, for most successful real estate investors, it’s a highly involved business endeavor. So, if you want to give yourself the greatest chance of succeeding in the multifamily investing game, writing an effective business plan is key. No matter the size of your potential investment, a business plan can help clarify your goals, as well as bringing potential obstacles to your attention. 

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