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the reach of most individual real estate investors. By
is provided that is ready to hand to your CPA for
Families Fund, for the purpose of spending these tax
What is the definition of insanity according to
using partial interest properties, I can sell an 8-unit
reporting on Schedule E. No more compiling
dollars on rental assistance, homelessness, affordable
Einstein? “Doing the same thing over and over
apartment building in Los Angeles and put my sales
everything for tax time, no more managing cash
housing, and housing counseling services.
and expecting different results.” Well, here we go
proceeds – through a 1031 exchange - into all three of these properties.
flow and paying bills every month and no more
Further, AB 1199 would require a qualified entity, currently defined as a limited liability company or
communicating with tenants!
AN OPPORTUNITY TO OUTSOURCE limited MpaArtNnAeGrsEhMipE, oNwTnRinEgSmPuOlNtifSaImBIiLlyIToIrEsSingle-
legislation for the third year-in-a-row that would force rental housing providers to register their
family rental homes, to report specified information
COULD PARTIAL INTEREST PROPERTIES BE A properties withGthOeOgDovFeIrTnFmOeRnt.YOU?
The real estate syndication companies that I work
This month, I have discussed why my clients have
about the property each year to the Secretary of
AB 1188 would require cities and counties to create decided to sell some of their real estate assets and and administer a rental registry with an online complete tax deferred 1031 exchanges into partial portal designed to receive specified information interest properties. By doing so, they can maintain
with will buy institutional-grade investment real
State’s Office. That office would have to create a
estate, re-sell it as partial interests, then stay on as
searchable database on its website.
the property and asset manager to guide the building through the business plan they created for it.
from landlords who own or operate five or more
Since the bill is an urgency measure, meaning that
monthly income and capital appreciation potential,
Many of my clients, after 30 or more years as
diversify their investment portfolio by geographic
if passed, it would take effect immediately, it will
to provide a variety of information regarding the
landlords, decided to “retire” from that business
location and asset type, and retire from management
require a 2/3rds vote. Usually a high bar, however,
location of rental property, its ownership, and
through selling their properties and completing
responsibilities. If this sounds appealing to you,
with Democrats enjoying more than a 2/3rds
pitesrohcacpuspapnacrtyia, lamintoenrgesotthperorptheritniegs. aItrealwsoowrthoulledarning
tax-deferred 1031 exchanges into partial interest
majority, it will be difficult to stop. It is hard to
apbrohuitb. itMaylatonldl-lforerde fnruombiessr uisin(g87v7a)r3io1u3s-1n8o6ti8c.es to
properties. By exchanging concentrated holdings
believe that someone would introduce a bill to tax
increase the rent or terminate a tenancy unless the
for more diversified partial interest ones, these
Securities offered through Emerson Equity LLC, member
property owners for the “privilege” of providing
landlord has submitted a form on the online portal.
investors can also delegate management and
FINRA/SIPC. Emerson Equity LLC and Specialized Wealth
rental housing, especially considering all that has
Management are not affiliated. All investing involves risk.
accounting duties to a professional company that
Always discuss potential investments with your tax and/
been piled on property owners over the last few
The SCRHA opposed the prior bills and assisted in
oversees billions of dollars in real estate. This
or investment professional prior to investing. Hypothetical
years. We would like to see this bill just go away.
killing them. We will work toward the same result in
management company takes care of everything –
scenarios herein are provided to illustrate mathematical p2r0in2c1ipfoarlsAoBnl1y,1a8n8d. they are not a promise of performance. There can be no assurance that any investment strategy will achieve its objectives.
Very far away.
including sending my clients their monthly income by direct deposit. At tax time, an income statement
16 | Southern California Rental Housing Association Rental Advisor April 2022
SOUTHERN CALIFORNIA RENTAL HOUSING ASSOCIATION - SCHRA.ORG 51
again. Assembly Member Buffy Wicks has proposed
rental dwellings. The bill would require landlords
Financial advisory