California has long been one of the most active real estate markets in the country. It has some of the nation’s highest property values, an enormous base of long-term real estate owners, a diverse commercial property inventory, and investors who increasingly look beyond state lines for replacement properties.
Put those factors together, and it becomes easy to understand why California
One of the most persistent 1031 Exchange myths is that investors must wait five years before completing another exchange.
That is not a general rule under Section 1031.
If you own qualifying real property, sell it, follow the applicable 1031 Exchange rules, and acquire qualifying replacement property, you may be able to complete another exchange even if your previous exchange
What Every 1031 Exchange Investor Should Know
Not all net lease properties are created equal.
Two properties may have the same tenant, the same advertised cap rate, and even the same number of years remaining on the lease. Yet one may be a strong, well-positioned investment while the other carries risks that are not immediately visible.
That is why evaluating
Tax deferral is only the beginning of the story
QUICK ANSWER: 1031 Exchanges matter because they keep investment capital moving throughout the U.S. economy. They encourage commercial real estate transactions, reinvestment, financing, property improvements, job creation, and local economic activity while allowing qualifying investment property owners to defer, rather than permanently eliminate, certain taxes when the IRS rules are properly
Seller financing can be a powerful tool for getting a commercial real estate transaction across the finish line.
A buyer may have the equity and experience necessary to acquire a property but may not want, or may not be able, to obtain conventional financing on acceptable terms. In that situation, a motivated seller may agree to finance a portion of
The honest answer is: Yes, a 1031 Exchange can absolutely be worth it, but it is not automatically the right decision for every property owner or every transaction.
A meticulously planned 1031 Exchange can allow an investor to sell an appreciated investment property, defer the capital gains taxes that would otherwise be due from the sale, and keep more of
If you spend enough time around sophisticated commercial real estate investors, eventually you’ll hear someone describe a Single Tenant Net Lease property on an Absolute Net Lease as “a bond backed by real estate.”
At first, that phrase can sound a little confusing. After all, a bond and a commercial property are two completely different investments… right?
Well, yes and
One of the most common myths about a 1031 Exchange is that once you decide to exchange, you are somehow prohibited from taking any money from the sale of your relinquished property.
That is simply not true.
You are allowed to take proceeds.
You are allowed to keep some cash or reduce the amount of debt that must be replaced.
If you have ever sold or are thinking about selling an investment property, there is a very important question you need to be able to answer:
Do you actually know the rules of the 1031 Exchange?
In my experience as a commercial real estate broker who specializes in investment sales and works with clients across the country, this is where
The first rule of the 1031 Exchange is “Equal to or Greater Than” meaning either you fully reinvest the entire proceeds of your relinquished sale and defer all your taxes… or you don’t do an exchange at all.
That simply isn’t the case.
A partial 1031 Exchange can be an incredibly effective strategy—one that allows you to defer a meaningful