Matthew Maschler:
Welcome to the Real Estate Finder podcast. I’m Matthew Maschler, the real estate finder @realestatefinder.com.
Staci Garcia:
And I’m Stacy Garcia, also a real estate finder.
Matthew Maschler:
All right. All right. So, um, we just, uh, last night, uh, Stacy and I, um, well, Stacy went to her first wrestling show, uh, real estate fi signature real estate finder, and the podcast, uh, sponsored Bo Ratton Championship Wrestling. We’re not gonna talk about the, that today on Real estate finder, uh, podcast. But if you’re interested, you can just Google Bo Raton wrestling, uh, Boca Raton 10 wrestling.com, BRC W Florida on Twitter and Instagram. Uh, and on YouTube, you can see, see the highlight videos. And if you are, uh, a wrestling fan and want to move to Florida, or, uh, if you want to train to be a wrestler at, uh, one of the wrestling schools and need housing while you’re down in Florida, please reach out to us@realestatefinder.com. We provide housing, um, to regular people and to wrestlers <laugh>. So, um, uh, how was, how was your weekend, Stacy?
Staci Garcia:
It was good. Yeah,
Matthew Maschler:
Stacy, um, specializes in no h HOA communities, and, and she, you know, she sells HOA communities also. And, uh, we were out the other day, and then she, just me to one of her clients who did not want an HOA and sought Stacy out for the no Hoa Boca uh, dot com brand. Uh, and she did live in a, but end up buying in a community with a, with a small hoa, but they weren’t. But, um, but I was talking to, to, to your client, and they were very, very happy there. Mm-hmm. <affirmative> and the HOA was not very, uh, problematic. So it was a happy, happy situation all around.
Staci Garcia:
Finding something with no HOA is actually very difficult.
Matthew Maschler:
It can be.
Staci Garcia:
Yeah. So I just found something this morning in Delray. It’s about maybe a football field’s away from Atlantic Avenue, but, and, and a totally affordable price point. And it was a four three and, uh, needs a ton of work. But if you wanna know about it, give me a call. Um, or email me. I just, it needs to be, um, sold to the right person. But I went up there and I checked it out and I thought, um, this is gonna be next year. It’s gonna be a million dollar property this year, it’s $500,000.
Matthew Maschler:
Right, right, right. Well, after it’s renovated. Yep. So, yeah. And then I, um, we’re about to take a listing, um, in an h HOA community with a guard gate, but it’s a very nice community. Uh, three bedrooms, two and a half, probably about $700,000. Um, uh, so, um, yeah, HOA communities, non HOA communities, uh, please feel free to reach out to us@realestatefind.com. And I actually have a, a viewer question. Uh, someone reached out to me, uh, one of my agents, uh, a lot of my agents, uh, listen to the podcast. And, and that’s, that’s why I do it because it’s, uh, it’s fun to do. And I like to teach and explain and, and have the microphone. I get the microphone. I can just say what I want. Cause a lot of stuff is locked up in, in, in my head. Um, it’s a relatively new agent and asked me a capital gains question.
Um, uh, Hey Matt, I’m hoping you can help me. I have a client. We we’re gonna be listing his property, and he, and he has a tax question, and if he sells, uh, he would, he would have around a $600,000 capital gain. Is there a way to defer this? If not, what are his other options? And, uh, capital gains tax is a, you know, well, taxes are the price we pay for living in a society, right? We all have to pay our, our fair share and our share of taxes. Uh, but that doesn’t always mean you have to pay the most taxes possible. Um, so, uh, on your primary residence, um, there is actually help from the government, right? We’re, we’re, we’re from the government. We’re here to help, uh, on your primary residence. Uh, and you know, not everybody knows this. And it’s important to know that, uh, when you sell your primary residence, uh, the first $250,000 of gain is excluded from the capital gains tax.
And, uh, if you’re married, uh, couple, um, that would be $500,000. Um, so if you buy a house for $500,000, sell it for a million, you don’t pay capital gains on that $500,000, uh, gain. Uh, also, um, you buy that same house for 500,000. The, the work that you do to put in that, the work that you put into the house, if you, uh, redo the kitchen, redo the bathroom, had an extension, uh, buy a shed, all of those things go into your basis. So keep good records of any, of, any of your expenses, uh, that you made to improve the property capital improvements of the property, cuz that goes into your basis and your capital gains is anything that you, uh, buy that’s above your basis. Uh, regular maintenance doesn’t count, you know, mowing the lawn and changing light bulbs, uh, regular maintenance doesn’t, uh, count.
Um, fixing the pool leak doesn’t count. Um, so, but you keep your records, and, and we’re not a tax expert here. I mean, look, I’m, I’m, I know I’m an expert, but I’m not a licensed tax guide. Uh, so definitely talk, talk to your accountant, uh, about that. But it’s important for people to know, especially in this market, with this rise in capital appreciation, uh, that the first $500,000 of capital gains is excluded. Uh, you have to have lived in the property for two of the last five years for it to count. So if it was your apartment in college and you’ve kept it for 30 years and you’ve been renting it out all this time, it is not your primary residence. It doesn’t count. If you only lived in it for a year, it doesn’t automatically become your primary residence. PE people get, you know, get a little cheeky, right? Oh, I’ll just move into it and make it my primary residence, two of the last five years. Um, and it doesn’t have to be too consecutive. You can live in it for a year, not live in it for two years, live in it for a year. Again, two of the last five years, uh, as, as your primary residence, uh, will qualify you for the $500,000 capital gains tax exclusion. So it’s important that, uh, my agents know that and my customers know that, uh, for their records,
Staci Garcia:
Is that what if you lived in it for a year in one day,
Matthew Maschler:
That is not enough time. Oh, oh, okay. So then you have to make a business decision, right? Mm-hmm. <affirmative>, you know, where are you gonna live somewhere else? So, so it, it is a good idea if you’re, if you’re a flipper mm-hmm. <affirmative>, right? You can move into a property, live there for the two years while you renovated, as long as it’s your primary residence, and then, and then yeah, if you’re, if you’ve renovated it, if you’re done in a year, now, it’s perfect. Mm-hmm. <affirmative>, um, if you have a $400,000 gain, right? And you’re looking at, you know, well, let’s say a hundred thousand dollars in, in, in taxes, is it worth it to live there for another year to save that a hundred thousand dollars? And that’s the business decision that, that you have to make you live there. Uh, so at at least it’s at a year and a date, it’s long term, not short term, right?
So it’s definitely a better tax rate mm-hmm. <affirmative>. Um, but you have to make the decision if you’re gonna turn it into your primary residence for, for two of the last five years. The other thing that you can do, if, if it, if it is what you’re doing, if it is your, uh, your business and you’re just going to use the proceeds to buy another property, you can do a 10 31 exchange, right? The sale of one property. You hold it in escrow, use those proceeds for the replacement property. Uh, so if you have any questions about 10 31 exchanges, uh, you can also reach out to us or your, uh, tax expert. We would, uh, find you some tax experts in 10 31 exchange, uh, experts, uh, to work with, uh, here in Florida, uh, for your, uh, 10 31 exchange. Because again, we all should pay our fair taxes, but that doesn’t mean you have to pay, uh, the most taxes possible.
Um, you know, there’s always talk about, um, eliminating the 10 31 exchange. Uh, people consider it sometimes one of those loopholes for the super rich. Uh, but if I can for a second, I want to justify the 10 31 exchange in case anyone out there is listening and, and doesn’t really understand it and does think it’s a loophole. Um, loopholes are the government’s way of controlling our actions. Uh, the reason the government creates something like a 10 31 exchange is because they want to do, they want people to do something. So they wanna reward people for doing the thing that the government wants them to do. Um, and without the 10 31 exchange, uh, a lot of people would hold onto properties. If you have an income producing property, um, you might be reluctant to sell it, right? Because you’re making money, you, you’d have to pay gains on it, so you don’t want to sell it, pay the gains.
You’ll have less money to invest somewhere else. Um, so what the 10 31 exchange does is it gives liquidity to the market. It, it gives the seller some reason to list their property. Uh, otherwise people would be holding onto these properties for longer than they want. And they, um, so what I’m trying to say is, um, more, it creates more sellers, it puts more properties on the market, and it creates more exchange. And we want buyers to come in. If, if a property is a little bit older and needs investment, we want a buyer to come in and buy it and maybe clean it up, renovate it, make it newer. So we, you know, the stock market’s very liquid. Um, there’s plenty of inventory, plenty of stocks to choose from. Um, and, uh, you don’t need to encourage sellers. There’s, it’s, it’s efficient market of, of buyers and sellers.
The real estate market, it’s not as liquid. There’s not as many, uh, pieces of real estate for sale. And especially right now, um, with a very limited supply of what’s for sale. Um, you definitely want 10 31 exchanges because you want to encourage sellers to list and sell their properties, uh, because it’s, it, it, it creates markets. You don’t wanna do something right now that would restrict a seller or tell, you know, give her seller a reason not to sell. So, yes, um, we, we want the tax revenue, right? We, we don’t wanna lose tax revenue. That’s what, you know, we can close this loophole and make more money for the federal government. But if you did that, you would have less transactions and less liquidity in the market. And less transactions meets means less, um, uh, improvements so that your real estate tax, uh, your real estate as a government, your real estate tax base doesn’t get higher because a new purchase gives you a higher real estate tax basis. The transaction, the money that realtors make, title companies make, lawyers make, uh, and all the, um, fees involved in exchange of monies involved. So you really want that liquidity, uh, in the market. And I hope that made sense, and I don’t wanna talk about it anymore. That makes sense. <laugh>,
Staci Garcia:
<laugh>, one of the questions that I asked you last week was, um, if you’re an investor or a property owner and you have someone living in your unit, is it, and you’re thinking about selling, is it a good time to sell while the person’s living in there? Or wait until and give the, uh, tenant notice and then try to sell the property without a tenant?
Matthew Maschler:
You know, the problem with selling, you know, in general, um, if, if your buyer is an investor, right? The investor wants, um, units that have income, produ, incomed producing units that have established tenants, you wanna look at those leases. And a long established lease is usually a good thing for investors. But if it’s a one-off, uh, residential property and the buyer’s, the end user and not an investor, then the buyer doesn’t want to deal with having a tenant having to evict a tenant or, or maintain a tenant. If the buyer’s buying it for themselves, they want it vacant. So one is on showings, right? It makes it a lot easier to show if the property’s vacant. Um, but also you’re, you’re, you’re limiting your buyers. You’re gonna have buyers that don’t want to take that project of having to wait out the lease and possibly evict, uh, the tenant. So, um, and especially if the tenant is paying, uh, below market rent,
Staci Garcia:
That’s a big
Matthew Maschler:
Issue. Yeah. Because the investor doesn’t want it, the invest, right? The investors’ looking at a, a, a property with a below market rent saying, well, I don’t want this tenant, right. Doesn’t matter how good a tenant he is, I don’t want this tenant. So the investors doesn’t, wants the property vacant, and the, and the, and an end user buyer wants the property vacant. So I’d, I’d wait out the lease, get the guy out, and then, uh, you know, stage of the house, market it, sell it for full value. Mm-hmm. <affirmative>, um, if you have a tenant below market, you’re not gonna get full value for the, for the property when you try to sell it.
Staci Garcia:
Yeah. There’s a lot of, um, listings that I’ve been noticing that are geared towards, uh, investors. And so they specify whether it can be rented the first year or two or not, and also specify how, how many times it can be rented per year and what the minimum time period for the rental is. And it says all of that on there because they’re gearing it towards investors who an tenant already lives there. So there’s, um, uh, more information in the listing than you would normally read about. And there’s a lot of properties on the market right now where the landlord is the seller. So, and I, and you know, a lot of times you look through them and also if you have, if you are a landlord and you’re looking for more properties, there are a ton of them on the market right now. And, you know, they have no restrictions.
So that’s, I’m, I always look and I categorize my, not my listings, but other people’s listings, whether they could be in investment property or not, they could be rented out quickly or not, and if they have to wait or, or not. And, um, sometimes I, I get incredibly frustrated because the listing agent, when you contact them, they don’t wanna answer any of those questions. They don’t wanna do any homework. And they don’t, they don’t. No, they don’t, they don’t know and they don’t wanna look it up. They’re like, here’s the number to call to find that information out. So that’s super frustrating. Um, and besides that, all of the errors that are made in the MLS lately, it’s like they, it’s like they’re creating the MLS listening while they’re driving or something. Cause it’s that bad. It’s, it’s not just spelling errors and it’s errors everywhere. So I, I found a, an amazing property and I sent it out before doing my research and, but then I started reading it and it said it was a highland beach penthouse on the beach with a 24 hour restaurant and you could rent it out daily.
Matthew Maschler:
That sounds amazing.
Staci Garcia:
I know <laugh>. And, um, it was on the map on the mls look in Highland Beach. And I thought about it and I’m like, I know, cuz I’ve lived here 35 years that there are no, um, commercial properties in Highland Beach besides the, um, hotel. So I thought about it and I’m like, where is there a restaurant that would be open 24 hours? Believe it or not, that, that, um, listing had the wrong zip code and it was on the map in the wrong place. It was the tides in Hollywood.
Matthew Maschler:
Hollywood, yeah. Not Highland. No. You know, it’s interesting, um, you know, with the wrong zip code because um, there was something, uh, that was listed in Fort Lauderdale, but it was like Lions in Hillsborough. Oh. And I was like, why is that?
Staci Garcia:
Right, exactly. Why is
Matthew Maschler:
Zip
Staci Garcia:
Before loaded out I’m up Pines.
Matthew Maschler:
Wrong zip code.
Staci Garcia:
Yeah. Or no, our Hillsborough Pines you don’t
Matthew Maschler:
Like when I talk about it’s
Staci Garcia:
Secret. I know. I want sh secret community. That’s true. True.
Matthew Maschler:
If you want more information about any think Stacey Garcias secret community, please reach out to Secret. Secret. No C no community.
Staci Garcia:
I don’t tell anybody about them. And, and uh, I also have secret auction sites, you know,
Matthew Maschler:
Secret auctions.
Staci Garcia:
Yeah. Secret auction sites. If you wanna know how to buy a house off an auction, Uhhuh or anything off an, an auction. I, I’m fascinated by auctions online. But, um, yeah. Yeah. So I sent out that listing f with daily rentals cuz my client’s looking for investment property on the beach Uhhuh. And I was like, wow. Restaurant, I have to do a check this place out. And then I looked at the directions after I sent it out Yeah. And it said, take ELL Beach Boulevard to the beach Holy Beach Boulevard. All right. That’s not in Highland Beach.
Matthew Maschler:
There’s no Highland Beach Boulevard is there mm-hmm.
Staci Garcia:
<affirmative>. So, um, I mean I guess I got excited for a moment, but then I realized it doesn’t exist here. And you know, I do know that it exists in Broward and it’s actually a thing. So there’s a lot of buildings that are Airbnb. Yeah. But, um,
Matthew Maschler:
So I wanna change the subject. Okay. Um, my friend David Dweck just celebrated a birthday. We had a big, uh, birthday fundraiser for him with, uh, jar and he raised over $18,000 for Jar. So I wanna give a shout out to David Dweck. Happy birthday. Happy birthday. David is the president of the Boca Ratton Real Estate Investment Club, uh, brick for short. And, uh, I’ve been a member of, uh, this organization for over 10 years. And I find it to be extremely valuable. I’ve met a lot of great, uh, people in the real estate industry, real estate flippers, wholesalers, lenders, um, uh, mortgage people, title people, lawyers, uh, that I’ve met through the Boca Raton Real Estate Investment Club. And I think anyone who’s interested in real estate as a career, um, should join and check out Brick if you’re, uh, anywhere in South Florida. David’s, uh, and I think David’s an an amazing, amazing guy. Um, there’s not a lot of people I will say that about. Um, and Stacy, you went to, I go to Rick meeting the other day
Staci Garcia:
Meeting. Um, how was it? It was, it was amazing. First of all, I was on running on Zero Energy because of the Stanley Cup playoffs and we had gone go Cats. Yeah. We had gone to the, um, games that week last week. And um, the energy at David’s meeting is super high level energy uhhuh. So, and the and the um, same as wrestling though, in a way. Yeah. Because he interacts with the audience. So, and the audience is, is it’s intimate. Let’s say there’s maybe 30 or 40 people there and I’m guessing, but you’re encouraged to talk Uhhuh, you know, and not just sit there and, you know, no one’s on their phones. It’s actually very interactive. So I found it really interesting the level of energy.
Matthew Maschler:
Did they play Deal of the week? They
Staci Garcia:
Did Uhhuh <affirmative>. And I kind of wanted to be like, wait, I missed my first night here. But again, let me get Well,
Matthew Maschler:
Deal of the month, I guess.
Staci Garcia:
Yeah. It’s deal of the month.
Matthew Maschler:
I’ve won that twice.
Staci Garcia:
Really? Yes. Yeah. I could see, I wanna get in on that. Yes, I do wanna get on that. You really should. I but I’m, I’m not ready, but I, I want to, um, but I really, he has, you’ve always said he had amazing speakers. He had a, a comedian that’s a old friend of his and he was amazing. Craig, his name is
Matthew Maschler:
Craig. Craig Shoemaker. Right. He did two shows at the Black Box Friday and Saturday.
Staci Garcia:
Yes. And he was like, I hope I see you there. I’m like, I’m gonna be there on Sunday.
Matthew Maschler:
<laugh>. I like, I like to think of it. It was a warm up act for Bo Ratton Championship
Staci Garcia:
Freshman. I’m sure. He was amazing cuz David said he was going and, and uh, he asked, he, he’s from Philly, he’s from um, uh, Mount Airy where my mom’s from.
Matthew Maschler:
Sorry. Sorry about your Sixers.
Staci Garcia:
Oh yeah. Thanks. So, um, he was hilariously funny and he had someone come up and do something in front of the audience and it was the funniest thing ever. And that was my first experience there. And that’s when I texted you, I said I had to join this group cause this group is hilarious. So it’s more like an improv thing than it was a real estate thing
Matthew Maschler:
Because they had a comedian and not a foreclosure attorney.
Staci Garcia:
Yeah, that’s true. But I would’ve liked the foreclosure attorney too. You would’ve, plus they, they introduced you to all the people with the wholesale properties and the people who have, we were sitting in a flooring, uh, design studio. So, uh, which is great cuz I needed flooring for my client and for us. So I thought, oh, this is awesome. But everybody there is a really good connection. So I thought it, you know, excellent energy and excellent speakers and great connections. Brick is a really good, um, resource for agents and it and the people that are in the meeting, they were not all real estate agents. No,
Matthew Maschler:
No. They’re investors. Not a
Staci Garcia:
Lot of agents. Yeah. So a lot of them are real estate investors or property flippers. So it was fascinating and, and also it’s good to share the information. David had a bad experience with Boynton and he was saying, I’m never coming back to Boynton because the city is really critical. And if you share information like that with me, I appreciate it. Cuz I don’t wanna get stuck referring a client of mine to do a flip or to do some work in a municipality that’s really not pro, um, renovating and, you know, pro or pro investment. One of the things I love about people that are very upfront and honest is they’ll tell you right away, don’t try, don’t even try to get a property in, you know, whatever city because they don’t wanna help you and they don’t wanna work with you. So it’s better than representing yourself selling the property and then the person says to you, you sold a property for me to renovate and this city doesn’t approve of anything ever. And they’re difficult and then you look bad cuz you referred them to a place that isn’t hospitable. So I really enjoyed that meeting a lot. Plus it doesn’t take long and it’s quick and dirty basically. It’s really funny. And then you leave and it’s doesn’t take your whole night. So I thought it was great.
Matthew Maschler:
That is great. That is great. Mm-hmm. <affirmative>. Okay, so I am, uh, I’m exhausted from my show I bet. And from my weekend. So I know this is a, a short, um, episode. Um, but I think I’m gonna call it here. Um, please feel free if you’re listening to gimme more questions. Uh, what I did was I’ve been calendaring the questions like when I get to email or text Yeah. I’ve been calendaring them in my calendar at 11:00 AM on Tuesdays. Oh, that’s a good idea. Cause that’s when we record mm-hmm. <affirmative>. And that way I just look at my calendar at 11:00 AM and I read the questions. Awesome. Cause otherwise I’m sitting here on my phone trying to find the questions, right. And then I get lost. So yes, we’re listener questions. Please get them to us by email. Matt realestate finder.com, uh, Twitter or Instagram, Matthew Ashler, uh, Matthew Ashler, uh, Facebook or wherever, uh, you get your, um, wherever you do your communications. And I’m, I’m glad you’re here. I’m glad you like the Real Estate Finder podcast. Um, and, uh, we will see you, uh, later and uh, next week I’ll tell you about all my new listings.
Speaker 3:
The all blue, when it’s almost that time. Light shows, cameras flash when I pass living in the moment. Forget about the pass. They saved the best for last Matthew Mania. We about to make a splash. Life is a marathon full of sharp turns, gotta keep pace while the hands on the five star I run show you can tell electricity, energy vibrate. I’m come,
Speaker 4:
You know,
Speaker 3:
You knows, you know whats, you know whats, you knows, you knows. We’re not afraid of the big bad Wolf. First comes.
