Let's talk about self storage.

So, I am trying to figure out a way to sale out, not interested rolling into a like property (1031 exchange).  Just retire and I am looking for some method to postpone / defer at least some of the taxes that will be owed.

I could carry a portion.  I thought I had heard of a REIT potentially that would qualify in a 1031 exchange.

Any other ideas?

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Thomas Kent
United Storage of Bowie
Bowie TX
(972) 672-2120
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The amount of paper you are willing to carry could affect your exposure to capital gains. If you only carry a small portion of the purchase price, you could be more exposed to capital gains. I recommend consulting with your CPA to determine that percentage.

Have you considered a 1031 exchange where you exchange into a Delaware Statutory Trust? DSTs come in all shapes and sizes and invest in various forms of real estate, including self-storage. Your CPA should be able to point you in the direction of a financial advisor who is familiar with the DST products. 

Any UPREIT option is likely dependent upon the location and quality/class of the self-storage property in question in order for that to be a worthwhile solution. 

I will email you some contacts who you can visit with directly regarding DSTs. 

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Jon Danklefs
First Vice President - Investments
Marcus & Millichap
San Antonio TX
(210) 343-7838
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I'm in the same boat Thomas.  My facility in Tomball TX is also for sale.  From what I've learned, taxes on taking the lump sum in one calendar year might be higher than taking it in multiple years as you could fall into a higher tax bracket.  However, taking it in multiple years might require owner financing in order to do so.  

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Mark Hansen
Rosehill Storage
(281) 351-8590
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I could carry the entire note with 20% down, but really would prefer to carry @ 1/3. 1031 Exchange into DST is what I am looking into, but not sure that is going to work for me. I might just continue to hold it. It's paid for and not a problem as long as my mgr stays in place. He is 1 mile away, I'm 3 hours away. $25k / month mailbox money is hard to give up.








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Thomas Kent





Parker Properties|Realtor
Cell: 972-672-2120

www.unitedstoragebowietx.com


Original Message:
Sent: 5/3/2024 9:44:00 AM
From: Mark Hansen
Subject: RE: Exit plan

I'm in the same boat Thomas.  My facility in Tomball TX is also for sale.  From what I've learned, taxes on taking the lump sum in one calendar year might be higher than taking it in multiple years as you could fall into a higher tax bracket.  However, taking it in multiple years might require owner financing in order to do so.  

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Mark Hansen
Rosehill Storage
(281) 351-8590
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Hi Mark,

My partner and I own a facility in the Woodlands/Magnolia area and are looking to grow through acquisition. I live in the Tomball area, and we would love to try to find the next property in the general vicinity of our current facility to work some degree of hub-and-spoke. Are you open to seller financing to some degree on that property? If so, my partner and I would love to talk to you about it.

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Tony McNickle
Co-Owner
Woodlands Storage and Office
Tomball TX
(281) 787-9590
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Original Message:
Sent: 05-03-2024 08:44 AM
From: Mark Hansen
Subject: Exit plan

I'm in the same boat Thomas.  My facility in Tomball TX is also for sale.  From what I've learned, taxes on taking the lump sum in one calendar year might be higher than taking it in multiple years as you could fall into a higher tax bracket.  However, taking it in multiple years might require owner financing in order to do so.  

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Mark Hansen
Rosehill Storage
(281) 351-8590
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Thomas/Mark, these are big decisions. Expensive decisions. CPA and Brokers will have the most “at bats” with issues like this. Thanks Jon for your response…right on the money IMO.

My past assumptions have been that 25% of sales price will be your tax +/- LOTS goes into your actual tax but for planning purposes start here. Sell for $3 million, $750k will be your tax. If you have $1 million debt, that means after tax you walk with $1.25. Meh.

But…talk to your advisors…make your decision…pay your taxes…pocket the rest and retire well…you’ve earned it.

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John McAfee
CEO / Owner
The Storage Place - DFW, Frisco
Midlothian TX
(214) 923-0070
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