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Strategic Real Estate Solutions for Older and Younger Partners

Discover lucrative investment opportunities for older and younger partners by leveraging depreciation laws and tailored asset management strategies. Maximize wealth transfer and net income with innovative approaches. Free Initial Consultation!

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Strategic Real Estate Solutions for Older and Younger Partners

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  1. Mining a Market Segment Patrick G. O’Healy, SIOR, CRE O’Healy Commercial Real Estate Services Los Angeles, CA 562-492-9234 pohealy@ohealycommercial.com

  2. SIOR Brokers Always Innovating!

  3. A Rich Target Market • Property Owner Characteristics • Age: 70+ • Owned property 20 years or longer • Likely fully depreciated • Possibly management intensive

  4. A Rich Target Market • Relatives Co-Owners • Divergent objectives • Older partners risk adverse • Younger partners seeking: • Greater return • Willing to accept more risk • More leverage • Expanded asset base

  5. Depreciation Laws • All real estate 1981 to 3-16-84 , 15 yrs • 3-16-84 to 5-8-85 , 18 yrs • 5-8-85 to 12-31-86 , 19 yrs.  • Residential real estate (MACRS) 1-1-87 to current , 27.5 yrs. • Non residential real estate (MACRS) 1-1-87 to 5-12-93 , 31.5 yrs ,  5-13-93 to current 39 yrs.

  6. Depreciation CalculationBy Purchase Date • All real estate purchased prior to 1986 is fully depreciated • Residential real estate (MACRS) purchased after 1987 has depreciation left • Non residential real estate (MACRS) purchased after 1987 has depreciation left

  7. The Approach • Sell the Asset • Divide the proceeds • Older partners • Un-leveraged investment • Charitable alternatives • Seeking maximum wealth transfer • Seeking predictable after tax income

  8. The Approach • Younger Partners • New leveraged investment • New depreciation schedule • Likely doubling of net after tax income • Shelter makes net after tax cash flow go up

  9. The Plan • Property owner target list • Develop alternative structures • Develop hypothetical outcomes • Tailor packages to seller specifics • Leverage for younger partners • Safety and charitable alternatives for older partners • Develop upleg alternatives for prospects • Linkage with charitable entity • Preparation for targets and knowledge of possibilities

  10. Differentiation From Competition • Targeting specific segments • Developed plan • Understanding the target market • Satisfying market needs • Showing new alternatives

  11. Two Pathways to Success • Linkage with the charity • Sale of the asset for the owner • Sale of the donated asset for the charity • Referrals to other donors • Sale to younger partners • Immediate transaction • New relationships developed • Ongoing transactions and referrals

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