Podcast #93 – Fundamentals – 1031 Exchange tips with Russell Marsan of IPX1031

Lane’s note: I personally don’t like 1031 exchanges for sophisticated investors who will one day graduate to syndications because they are not “like kind” exchange. It just goes to show that understand where your advice is coming from. A lender will want you to get a portfolio loan, a lawyer will want you to get an elaborate entity structure, and a 1031 custodian will want you to do a 1031 exchange.
You get to list and buy a property from who ever
I bought 9 properties by selling 2 properties and delayed the taxes
Note: recorded in 2017 prior to 2018 tax changes
a 1031 exchange avoids capital gain and depreciation recapture
Drawbacks – you have to time the sale and purchase of the new asset
In a sellers market you can get a good price but have trouble finding a good asset
45 day rule – you have this time period begins at the close of escrow of the first property you have to identify a list of property that they would possibly close on
180 day rule – you have this time period begins at the close of escrow of the first property you have to close on the replacement property
Try to line up inventory in the pipeline
Delaware Statutory Trust – you close on relinquished property and park the money goes into the exchange account with intermediary
Reverse exchange – alleviates selling property and not finding anything – you can take all the time in the world to acquire the property and then sell your relinquished property, the problem is that it is costly, qualified intermediary else closes the new property, required cash to purchase new property and possibly need a L1 environmental
Section 721 – donate real estate to partnership interest
And exotic exchange ideas

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