One of the first things to look at if you are a real estate investor is to consider whether a 1031 exchange would benefit you. Bob Nelson, Eugene real estate investment broker, Pacwest Real Estate Investments, examines the strategy and benefits of a 1031 exchange in real estate investing.
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It’s imperative to understand the rules involved in a 1031 exchange and to consult a CPA and/or a tax attorney.
An important question is how much taxable gain you would have if you sold a property. This question will help you identify whether you have sufficient gain to go through the 1031 exchange process.
Finding out whether you have sufficient gain can often be discussed with a simple phone call. Discussing this over the phone can save a lot of time and effort rather than getting together for an hour to answer a two-minute question or a thirty-second question, and I encourage any investor interested in starting the 1031 process to begin with a call. They provide an opportunity to identify what the real problems are as opposed to just informational-type gathering and sharing.
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Bob Nelson, Eugene Commercial Real Estate Investment Broker:
Finding out whether you have sufficient gain can often be discussed with a simple phone call. Discussing this over the phone can save a lot of time and effort rather than getting together for an hour to answer a two-minute question or a thirty-second question, and I encourage any investor interested in starting the 1031 process to begin with a call. They provide an opportunity to identify what the real problems are as opposed to just informational-type gathering and sharing.
If you’re in the first formative years of your investment portfolio, your next transaction probably won’t be your terminal one—the one that you’re going to own forever and ever. Recognize that the typical holding period for a parcel of property is probably somewhere around five to seven years, and then you tend to outgrow it. What generally happens is that it becomes more valuable, you have growing equity, and you start to realize that with that equity you could own something different—potentially something much bigger, easier to manage, or whatever it would be. This is the opportunity to look at the big picture and evaluate your investment plan, your end game, and your strategies in regarding your investment portfolio.
Investment Success and the 1031 Exchange is from Bob Nelson and Marcia Edwards on the “Real Estate Today” Eugene, Oregon, radio show, which airs at 5:30pm daily on KPNW.