There are 101 ways to acquire real estate and only one as cash.”Cliff Weaver.
There are two reasons to consider a real estate exchange: one is to defer capital gains tax (IRC Section 1031), and the other is to use real estate equities to transact real estate. We understand creative transaction making and seller financing. In the event that you have under-utilized assets such as: unused real estate in another state or country, personal property such as vehicles or collectibles, or professional services, you can use those as cash in the purchase of real estate. Through the use of creative ideas and creative real estate agents, we attend local, regional, and national marketing meetings and utilize online networking where we market properties on behalf of our clients. This type of real estate practice looks at the benefits of real estate ownership as well as the real estate itself.
What is a 1031 exchange?
The Internal Revenue Code Section 1031 provides for the deferral of capital gains tax on a transaction when real property held for investment is sold and replaced through a qualified exchange. Essentially, a 1031 Tax Deferred Exchange allows you to utilize 100% of your equity in the purchase of your next investment.
What kinds of properties can be exchanged?
At a recent marketing meeting, there were triple-net leased retail properties exchanged for development land. Other properties offered for trade included office buildings, hotels, condos, assisted living facilities, vineyards, RV parks, notes and cash. The properties were geographically located in various parts of the world: across the United States, Canada, Mexico, and even a resort in Fiji.
What if I have little or no property to exchange?
Imagine you want to acquire real estate but you have limited cash. However, you might have inherited a small property in another state, or you own a "toy" that you never use, or a diamond ring that goes untouched and unused, or you have trade credits from your business, or perhaps even a personal I.O.U. All of those could be used as your initial down payment on the property you desire.
A real deal: we have a client with a $700,000 lake front home, a Harley motorcycle, a Corvette, two months of time-share townhouse in Mexico, and construction services. He is willing to use those assets to acquire fix-up/rehab opportunities anywhere in the country.