There’s no explaining human behavior when it comes to common sense vs. either comfort zone or convenience. I’ve seen folks hold on to absolute pieces of dog dung out of nothing more than an inexplicable stubborn insistence on being able to manage the property themselves. One client, back in late 2001 actually refused to do a tax deferred exchange, because, and I swear I’m not making this up — they (the husband) didn’t want to own property too close to their aunt and uncle.
You just can’t make up anything that, uh…never mind.
The wife rolled her eyes, turned to me and said, “Don’t ask” — and that was that.
I’m not speechless very often, but I was that day. What’s even more incredible is they’d referred their next door neighbors a few years earlier. To make a long story mercifully short, the neighbors took the three properties I wanted these folks to trade into.
Go back to the year this happened — 2001.
You guessed it. Their neighbors did as advised. The trio of duplexes took a total of $80,000 or so to close. They traded them in the early spring of 2003 — the net proceeds check deposited into the accommodator account was over $250,000!
Seems there was this BBQ, and my clients shared their story, including the exceptionally happy financial ending, with their gracious hosts.
The hosts were not amused. When reminded of the stated reason for passing on these three properties, those present agreed, the wife just about exploded all over her husband. By all accounts, it wasn’t pretty.
I never did find out the deal about the aunt and uncle. It still bugs me.
Meanwhile, back at the ranch…
The folks who bought the three cool properties, then traded up, tax deferred. We turned their $250,000+ into over $2 Million of properties in the exchange. That was around April of ’03. Things happened a lot faster in those days.
Memories of almost daily Rainbows back then.
In the last quarter of ’04 they again executed a tax deferred exchange. This time taking their net proceeds outa state. By then, I’d been taking my clients’ equities out of San Diego — at least the ones who’d listen. Almost all agreed it was the thing to do — it had become fairly obvious at that point.
Anyway, they traded well over $600,000 in net proceeds in that one. Life was good.
Cartoonish appreciation was even better.
Their neighbors? The original clients who referred them to me in the first place? The ones who passed on the original three properties? (They were so cool.)
They’re divorced. They had me sell their properties. They took the profits and paid taxes. I did everything but get down on my knees a beg them not to.
Nope — sell them, or we’ll find someone who will. They were both leaving San Diego. Though in the process of divorcing, they remained together until the properties, and their home were all sold.
When the escrows all closed, they invited me over to their last neighborhood BBQ — which unfortunately I was unable to attend.
Seems I had scheduled time to visit with my aunt and uncle that weekend.