One of our clients had owned her triplex on West 111th Place in Inglewood for over thirty years. She had managed it herself for most of that time, dealt with the tenants, handled the maintenance calls, and done what long-term owners do, which is keep things running.
A cold call from Jack started the conversation and like a lot of the best conversations we have had, it turned into something neither of them expected going in.
What the Advisory Session Revealed
When they sat down together to review her property the picture that emerged was one that a lot of long-term owners in Los Angeles would recognize. The building had appreciated significantly over three decades, which sounds like a good thing and in many ways is. But it also meant that the return on the equity she had built up inside the property had shrunk considerably relative to what that equity could be earning somewhere else.
On top of that, one of the three units was renting at $1,222 per month, well below what the market was supporting for a comparable unit in that area. The expense ratio had room to improve. And after thirty-plus years of ownership, the management responsibilities that had once felt manageable had started to feel like more than they were worth.
With that picture on the table, Jack walked her through her three options.
Holding and improving was possible. She could work to bring rents closer to market over time, reduce her expenses, and continue owning the asset. But the management burden was real, the rent-controlled unit was going to take time to reset, and the return on her equity was not going to improve dramatically in the near term.
Refinancing and redeploying was another option. She had significant equity built up and could have pulled some of it out without selling. But given her goals, her age, and how tired she was of managing the building, taking on new debt and continuing to operate the property did not make sense.
Selling and exchanging was the answer that kept coming back to the top. The building had done its job. Three decades of appreciation had built something real, and the right move was to take that equity, protect it from capital gains tax through a 1031 exchange, and put it to work somewhere that did not require her to manage anything.
After a few follow-up conversations, that is exactly the direction they went. Jack connected her with a DST broker who walked her through the exchange options, and while those conversations were happening, Jack got to work preparing the property for market. Some deferred maintenance needed to be addressed before the building would show well, and Jack coordinated the work to get it there.
Getting It Sold
We listed the triplex and got it sold for $1,030,000. Jack represented both the buyer and the seller on the transaction. There were challenges along the way but Jack worked through them and kept the transaction on track.
The escrow closed in thirty days, cleanly and on schedule, with the 1031 exchange lined up and ready to execute on the other side.
The Outcome
After the exchange into Delaware Statutory Trusts, her income increased by $45,600 per year compared to what the triplex had been producing. That is $3,800 more per month, with no tenants to manage, no maintenance calls to field, and none of the day to day weight that had come with owning the building for thirty years.
For anyone unfamiliar with DSTs, they are a 1031-compatible investment structure that allows owners to exchange out of an actively managed property and into a passive, professionally managed real estate portfolio without triggering capital gains tax on the sale. For a long-term owner with significant appreciation, the combination of tax deferral, passive income, and zero management responsibility makes it one of the most compelling options available. Most owners have never heard of it until someone actually sits down and explains it to them.
Thirty years of ownership had built something real. The advisory session helped her figure out how to make that something work harder for the next chapter of her life.
Why This Story Matters
This one does not have a dramatic backstory the way some of our other deals do. There was no family conflict, no inherited property nobody wanted, no crisis to navigate. It was just a long-term owner who had been doing things the same way for a long time and had never sat down with someone who would show her what else was possible.
That is actually the most common situation we encounter. Not a crisis. Just an owner operating on autopilot with equity that is not working as hard as it could be, and nobody in their corner willing to tell them that honestly.
The Stress Test is what made this possible. One session, a look at the real numbers, and a conversation about what she actually wanted from the asset going forward. That conversation changed her financial picture by $45,600 a year.
If you have owned your building for a long time and you have never had that conversation, reach out. It is free, it takes 20 to 60 minutes, and you might be surprised what the numbers actually say.
