Base Year Reduction - $360,000 in Assessment Saved for Life
A success story featuring a 6-unit apartment complex in Beverly Hills. Discover how our base year reduction approach resulted in an impressive $360,000 assessed value reduction from the sales price, guaranteeing enduring financial advantages for the owner.
Reduced Base Year
Savings Per Year
Client purchase and completed a 1031 exchange in 2019, acquiring a six-unit apartment building located in Beverly Hills.
Amidst the pursuit of a suitable replacement property for their 1031 exchange, our clients encountered a demanding scenario. The constraints of time were pressing, given the urgency of the exchange process, while simultaneously grappling with escalating interest rates during 2018 and 2019. Ultimately, they reached a decision to acquire the property located in Beverly Hills.
Furthermore, the buyer's broker lacked experience and failed to represent them effectively during the transaction, as they had never dealt with an investment property before and agreed to a sale price near the listing price. Soon after purchasing, the buyer's did some research and concluded they felt they overpaid giving the sales that occured in the months after.
We thoroughly reviewed the listing brochure and noticed inconsistencies, which led us to believe that the listing price was artificially inflated by about 20%.
Our resolve was unwavering in presenting a case of 1031 duress, emphasizing the pressing need to expedite the deal's closure to evade property gains tax and a 25 basis point interest rate hike. Moreover, with strict rent control regulations in effect, the projected income stated in the listing brochure would never materialize.
This research proved crucial in our valuation strategy. As experts in the income approach, we took into account Beverly Hills' strict rent control policy and we presented a case based on the in-place income.
Our diligent research and expert representation helped overcome a challenging Rule 2 argument, which is notoriously difficult to refute.