As an expert in 1031 exchanges with commercial real estate, James Bean delights his clients with his expertise. As a stand-up comedian, he delights his audiences with his wit.
The 1031 exchange is a popular strategy among real estate investors that allows them to defer capital gains taxes on the sale of an investment property. It allows them to reinvest the funds into another replacement property. And James Bean has developed a keen comprehensive skill set for specialization in investment brokerage and National 1031 Tax Deferred Exchanges. Involved in commercial real estate for nearly 25 years, James is able to successfully close transactions in all 50 States.
Here he discusses how planning is a huge factor in developing and implementing a successful 1031, as well as the biggest mistake people make when initiating a 1031.
What is James’ secret weapon? An incredibly diverse and hard-working network!
And finally, James reveals funny uncles sparked an interest in performing as a standup comic.
Listen to James’ story here.
Click here to read the transcript
Intro Speaker 0:00
From Los Angeles, this is the Echelon radio network.
Jerri Hemsworth 0:16
So, this is Jerri Hemsworth with the Echelon Radio Podcast and I’m sitting today with James bean of S.V.N. How are you?
James Bean 0:26
I am well, thanks for having me, Jerri.
Jerri Hemsworth 0:27
Oh, I’m so glad you’re here. Tell me what is SVN? And what does that stand for?
James Bean 0:35
Thank you for asking that question. I really appreciate that. So SVN: It’s the new version of the old Sperry Van Ness. Sperry Van Ness was a commercial brokerage that had started in the late 80s by a couple of guys by the name of Rand Sperry and Mark Van Ness. And they were a couple of Marcus & Millichap guys that came up with a better mousetrap than Marcus & Millichap so then decided to go off on their own. And unfortunately, parted ways, early 2000s. And when they parted ways, Mark bought out Rand. Rand had to go quiet for five years. And over that time, Mark built what is now known as the shared value network. SVN. We are the only commercial brokerage, international commercial brokerage that is completely transparent, even to the public, we have a weekly call on Mondays where anybody, our competitors, the public, anybody can call in, and listen to all the new inventory that we bring out each and every week. And it’s a national call. We’re in nine other countries, we have 200 plus offices, all independently owned and operated, but all operate on the same corporate platform. A network of sharing value, shared value network.
Jerri Hemsworth 2:09
Got it. And there you have a specialty in in commercial real estate.
James Bean 2:14
Jerri Hemsworth 2:15
Tell us about that.
James Bean 2:16
So I purely focused on investment sales. I don’t do leasing, I don’t really do user sales.
Jerri Hemsworth 2:25
James Bean 2:26
I’m focused on people that own properties for investment are my clients. And I’m also a national 1031 expert. There’s not many, a lot of brokers can do a 1031 exchange, they know how to do it, but the issue is, is in order to perform a successful 1031 exchange, it takes a lot of planning. And the planning for the exchange should really begin before the property owner even puts the property that they’re going to relinquish on the market.
Jerri Hemsworth 3:00
Wow. So we’re talking a span of a year? years? Or where should that timeframe? In a perfect world, that timeframe would be what, for example?
James Bean 3:16
You could probably do it in 90 days.
Jerri Hemsworth 3:18
Oh, oh, okay. Yeah. All right. But it’s a plan
James Bean 3:22
Depending on how much property they have to relinquish would depend on how long you need to you know, if they have a prop, excuse me a portfolio full of property, and six months to a year. Obviously, with any kind of planning, the more time you have, the better the plan is. But that exchange should really be mapped out so that they know what their options are. Are they going to achieve our investment goals? etc.
Jerri Hemsworth 3:49
What’s the what would you say is the biggest mistake you see people making before they enter into this? Or Do they come to the table too late? Or what is the big flaw? That or misconception even that people have about it?
James Bean 4:06
Well, when you sell your property, you have 45 days after from the day of close, to identify the properties that you want to exchange into, and most people identify, you can identify three properties. There’s two other identification rules. We don’t need to get into that, but the most common is that they think that 45 days is plenty of time. And it’s not. You need to fact many of my clients are closing their properties within those 45 days. Especially in the world we live in today.
Jerri Hemsworth 4:42
James Bean 4:42
The that the the market for exchange options, is extremely volatile and has a tremendous amount of velocity. So it’s kind of like getting on the 101 freeway. You know, if you don’t get on there and 80 miles an hour, you can’t get run over.
Jerri Hemsworth 5:03
Yeah. So so a lot of people are just not aware of how much time or and, and traffic or capacity is going through and stuff is getting done during that time.
James Bean 5:16
Yes. This is why more than 60% of exchanges fail every year.
Jerri Hemsworth 5:21
James Bean 5:21
Jerri Hemsworth 5:22
60%. Whoo. That’s tough. That’s really tough. So what do you bring to your clients? What is the What do you hear most often? With? When they come back and go, gosh, James, that was Thank you so much. You. What, what do you what? How do they complement you the most?
James Bean 5:48
How smooth it went.
Jerri Hemsworth 5:49
James Bean 5:53
I’ve been doing this long enough to where I have now built my own national network of brokers that I can reach out to I have access, easy access to more inventory than your typical broker does, because I’ve developed close personal relationships with brokers all over the country, there’s 15 to 20 brokerages that are the major players, and they’re spread out all over the country, and I can literally pick up the phone and many of them I have their cell phone numbers, the owners of these brokerages, not just the agents of the brokers. And so having that access I basically have built the well oiled machine.
Jerri Hemsworth 6:43
James Bean 6:44
So there’s no guessing.
Jerri Hemsworth 6:46
Yeah. So are you seeing any trends as to where it or an end? Forgive me? Because I’m not that up on 1031 exchanges? And and especially for investment properties? Is that are there trends where people like to exchange in different areas of the country? Or do you see people, oh, like, everybody’s going towards Tennessee right now or towards Florida? Or? Or is it pretty much anywhere and everywhere? Is it the wild wild west?
James Bean 7:19
It’s actually a great question. Many times, the people that I represent are typically exchanging for the first time. So in many of them aren’t even familiar with the property types that I offer to them. And I actually speak about the myths of the 1031 exchange. And one of the common myths is that people automatically assume that a commercial investment property comes with a lot of maintenance and management.
Jerri Hemsworth 7:49
James Bean 7:50
Typically it does. But there’s other options that are absolute that are actually zero responsibility and zero management. Mailbox money is what we refer to it as because that’s literally what it is. As far as areas, the common thing is out of California because I can, in most cases, double the yield, the annual yield of what you could receive on your property, if you’re willing to go outside of California. And it’s getting to be more and more willing to go east of the Mississippi. You know, because states like Nevada and Arizona, New Mexico, Colorado, Idaho, these these states are gaining a lot of popularity as well because of their proximity to California. So many times the client will ask me well, what states are better and there are some from tax purposes. Although a lot of it doesn’t really matter unless you live in that state. The first question I asked people is where do you like to travel? And so I have sold many properties in the Carolinas because it’s a great destination I’ve had a lot of my clients are golfers and they love golf trips and so hey, you know, take it off to the Carolinas and write it off because you went to visit your property.
Jerri Hemsworth 9:12
Yeah, yeah, that makes sense. And it’s gorgeous and plus you’re you’re on a coast if you like the beach, the Outer Banks, we’ve we’ve vacationed there, but it we’ve heard of more and more people looking at going to the Carolinas,
James Bean 9:27
Tennessee is popular state, too, by the way,
Jerri Hemsworth 9:29
That’s what keeps coming up in conversations. Tennessee and and, but I think people are with especially with COVID and being able to work remotely. I think in I’m hearing a lot more conversations of people moving and being able to work remotely. So I’m hearing a lot of, of just openness to people, to people and businesses being outside of California. So that’s kind of cool. So I’m gonna change I’m gonna switch gears on you here because you like to perform. I learned that about you. karaoke.
James Bean 10:08
Jerri Hemsworth 10:09
Karaoke? Where do you hit a karaoke place? Here locally?
James Bean 10:14
Actually Ventura has got a couple of places. My favorite right now is a place called GG’s lounge. It was before the pandemic, you’re just absolute textbook. dive bar, really, which is always the best carrier spot. Yeah. However, during over pandemic, they completely gutted the place and remodeled it. And it doesn’t have the same vibe
Jerri Hemsworth 10:43
Its not divey enough. You like the divey joints.
James Bean 10:47
Sure.You want you want divey lighting, you don’t want to be on stage with really good lighting.
Jerri Hemsworth 10:54
You don’t want modern and what the heck, what is that about?
James Bean 10:57
But the guy that did it there before? Actually, it’s this older gentleman that had designed this software and made it like the best karaoke experience possible because you- everything was on a computer, and you logged into the computer and you put all the songs you wanted to do. Plus it kept him on track is everybody was just automatically in order. Plus, he would bring handful of props for you to use guitars and other things. And they had a nice stager, they do still have a nice stage stage is important.
Jerri Hemsworth 11:29
James Bean 11:30
I don’t need a mic. I just need to stage.
Jerri Hemsworth 11:35
But you also- we were just talking about stand up comedy.
James Bean 11:40
Jerri Hemsworth 11:41
And you said as a kid, you wanted to be a comic or a stand up comic? Or what was that like for you as a kid? What was your dream?
James Bean 11:54
Well, back then, you know, in the 70s, it was really about just, you know, being funny to an audience. I don’t think they really call it stand up comedy back then. Although, you know, just being a comedian. Right. You know, I growing up I loved Bob Hope. You know, Jerry Lewis, and you know, Richard Pryor
Jerri Hemsworth 12:22
James Bean 12:23
George Carlin. Yeah, in fact, I have a new opening that I just used on some open mic night stuff where I said, you know, I’ve always wanted to be George Carlin. And now here I am the oldest guy in the room, and I’m on stage
Jerri Hemsworth 12:37
James Bean 12:39
So I can remember my earliest memory as a kid was a Christmas. Well, first and foremost is I had a pair of uncles, my mom’s brothers that- these guys, not only were they great joke tellers, but they had these just infectious laughs. And so as kids, the grandkids would whenever we were together for like Thanksgiving or Christmas, is we’d all get together and say like, hey, we need to tell uncle Mark or uncle Tony, some jokes. We can hear these guys laugh. And so it kind of that’s kind of how it started, and then I remember one specific Christmas where my younger brother had gotten one of those built in mic. Panasonic tape recorders. Yeah, the really cool ones. Maybe they came in all the color plastics.
Jerri Hemsworth 13:27
James Bean 13:27
And we were all upstairs, the kids were all upstairs. And it just we have a tape in and we’ve just started, you know, I don’t know, I would love to recreate that because it was like we were doing our own little comedy skits on recording it. And just having a blast, you know, and recording toilet flushing and you know, stupid stuff, but we took it downstairs and played it for the adults. And they were all crying. I mean, just howling. It was just a really great experience. And so I think that that fueled some of it through. When I was in my early 20s, I got turned on to being a mobile disc jockey. I did over 150 wedding receptions in about a three year period. Holy smokes. Yeah, I was crashing weddings long before the movie. But it was because some of the people that I was studying under and watching around comedies like you know, it’s all about my time, you know, you got to get on stage, get stage time and figure out your shtick, I guess. So. It’s evolved from there.
Jerri Hemsworth 14:43
And you said you mentioned that you actually took a class in the early 2000s about being a stand up comic or a comedian. And that was in Phoenix.
James Bean 14:55
Jerri Hemsworth 14:55
Yeah. And how long was that class.
James Bean 14:58
It was a nine week course.
Jerri Hemsworth 15:00
James Bean 15:01
Yeah, community college course-
Jerri Hemsworth 15:02
And what was the final?
James Bean 15:04
We had to literally do a five minute act in front of a live crowd at an actual comedy club.
Jerri Hemsworth 15:11
And you were pumped to do that.
James Bean 15:12
Jerri Hemsworth 15:13
Whereas other people were terrified and said I’m out. Right?
James Bean 15:17
Jerri Hemsworth 15:19
How often do you get to perform now?
James Bean 15:23
Well, I’ve just recently learned that there’s a couple of places in Ventura that have open mic nights so I could literally do it two nights a week every week if I wanted. Right now I’ve been I mean, I’ve got years worth of comedy riffs written just pages and pages and pages of things, and so right now I’m looking to create another five minute act. Both of the places that might be open mic opportunities or five minutes and so right now I’m in the I’m in the process of doing that with the hopes of ultimately getting on to the Ventura harbor comedy club.
Jerri Hemsworth 16:07
James Bean 16:08
Yeah and I’m not looking to do it for a living I just want to you know, I’m totally fine with being a five minute guy yeah that five minutes I did for my final I had more than 40 hours into it from the writing and crafting and you know, I brought eight plus years of professional speaking, so you know, it was I was got to be where I was very technical, and- it when I think about all the time I took the rehearse that in fact, I took two days off of work before the final and that’s all I did for 16 hours was run that thing over and over and over and over and over again.
Jerri Hemsworth 16:44
Do you write every day?
James Bean 16:48
Jerri Hemsworth 16:49
Really? Do you have like a journal or a notebook where it’s all there?
James Bean 16:53
I wish you remember there’s a great Seinfeld. Do you ever watch?
Jerri Hemsworth 17:00
Sure. Of course.
James Bean 17:01
So, there was an episode where Jerry was the same thing you know, whenever you get an idea you’d write it down. And so this episode was he woke up in the middle of the night having a dream and it woke him up there he’s like, ‘Oh! That’s a great comedy bit’, but he was half asleep and he scribbled something on the pad and the next morning he couldn’t- he was like ‘what the hell does that say’ so that’s I totally identify with that because that’s what I do. I have note pads all over my house. Even on my phone if you look at my phone right now the note thing on the iPhone is I got comedy riffs on there or I’ll turn on my microphone.
Jerri Hemsworth 17:37
I was gonna say record it!
James Bean 17:39
i’ll be driving down the road and I’m like oh I need to- ‘Siri launch microphone’ and then I get off on a tangent.
Jerri Hemsworth 17:47
And she says not again. C’mon James.
James Bean 17:51
No, and she repeat something else- ‘ that’s not what I said!’
Jerri Hemsworth 17:55
I said microphone!
James Bean 17:58
That’s part of my routine that I’m working on right now is that you know I’m old enough to remember black and white TV but I’m young enough to appreciate the technology except when Siri doesn’t hear what I say.
Jerri Hemsworth 18:12
Yeah and then Siri’s- Yeah, I understand 100%! Thanks for being with me here James. It was really really fun and I really I want to come see you. I want to let us know when your doing your stand up I want to come laugh.
James Bean 18:28
Yeah, the Ventura harbor has a thing where you- they’ll give you five minutes if you bring 10 guests.
Jerri Hemsworth 18:34
James Bean 18:35
Yeah. Shocking why they would allow you to do that. But so I have no doubt-
Jerri Hemsworth 18:42
But ten! Not five! You need two people. You need one person for every 30 seconds.
James Bean 18:47
Jerri Hemsworth 18:48
Wow, that’s some currency. Thanks for being here.
James Bean 18:52
Thank you very much. Appreciate it.
Intro Speaker 19:04
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