1031 Exchanges
A 1031 “Like-Kind” Exchange enables an investor to sell his or her property, reinvest the proceeds into a new property, and defer all capital gains taxes.
According to IRS Section 1031 (a)(1):
“No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment.”
The most popular type of 1031 Exchange is “Delayed” or “Forward” and the most common strategy is exchanging a smaller apartment building into a larger apartment building.
There are several benefits of 1031 Exchanging Apartment Buildings. These include:
- Greater Cash Flow – Investors are able to sell an investment property that brings in little to no income and purchase a new property that generates a much wider stream of cash flow.
- Leverage – Through the combination of 2% per year building appreciation in San Diego, CA and the funds saved by deferring capital gains, multi-family investors have the ability to purchase a much larger building in an improved location.
- Portfolio Consolidation – Exchanging a smaller apartment building(s) into a larger apartment building minimizes management duties and maximizes the cost advantages from business expansion.
- Alleviation of Hands-On Operations – Owners that handle the day-to-day operations of their own investment property are often troubled by a continuous list of management and maintenance issues at all hours of the day. Exchanging to a larger building and hiring a competent property management company can add significant value to your investment, lessen stress, and free up more of your time.
I, Louie Goros at Valor Real Estate Group, take pride in my profession as a Multi-Family Investment Specialist and work with the very best 1031 Exchange Accommodators in the business to grow this beautiful city of San Diego and MAXIMIZE YOUR RETURN ON INVESTMENT! Call me at (630) 247-5881 and let me go to work for you!
