I have $1.4 million in a 1031 exchange and looking to buy a rental.?

Question

In particular, I'd like the geographic location with the best overall cap rate for residential rentals.and best opportunity for appreciation with the least management hassle. I prefer only residential rentals, but will go to multi-family - doesn't have to be single family.

Answer 1

As you probably know, you'll likely get a better cap rate with multifamily rentals than with a single home for that price, due to the efficiencies involved. You may be able to string together a few homes that offer better overall return, but I wouldn't describe that as the situation with the least management hassle.

You also might consider a commercial property - with the right property and tenants, you'll definitely have fewer management demands, and avoid the many legal issues and responsibilities that come along with providing shelter.

For residential properties, I'd focus on areas with a strong underlying economic base and good job outlook, and high desirability for renters. San Francisco/San Jose, Seattle, Portland are West Coast examples.  A current surplus of available inventory is a plus, if the rental housing demand is still strong, since your dollar will go farther. Commercial properties will have additional parameters to consider.

I can send you info on residential or commercial properties in California that might meet your needs, if you are not currently committed to a buyer's agent. You can contact me through my website, below. Good luck, and keep your timetable in mind - there's nothing more aggravating than missing IRS deadlines for an exchange!

Answer 2

ask your preferred REO officer might as

well get the biggest bang for the buck.

[am also a buyer's agent!]