Living Free on Residential Investment Propeties...

I enjoyed this thought today.

If an investor owns 10 properties and puts them on an amortization schedule such that one property is paid off every year the investor can refinance that property on a 10 year amortization schedule and live comfortably for the rest of their life...(Living for Free...wow)

Here is the really fun part...that income is tax free!

Now...lets go get those properties...(We know of a screaming deal on a duplex that is not yet on the market..call quick)

...I bet you know that loans with shorter amortizations schedules offer the benefit of lower interest rates, significantly less interest paid and a pay-off date visible from the starting line.

Summoning the cash needed to make these investments cash flow positively can be a short term drain that pays off in the peace of mind of owning a self sustaining investment.

Dave

dave@alternativerealtor.com

541-302-5999

1031 Tax Deferred Exchange

QUESTION:
Can inherited property, such as a home that was once a
primary residence, be used in a 1031 transaction?
And, if so, should the property have remained vacant,
or produced income (rental) following inheritance?

ANSWER:
A 1031 Tax deferred exchange is a transaction that allows a party the ability to reinvest their capital gain in a "Like Kind" property within certain time limits and rules without creating a taxable event. (read: really cool tax law)

A CPA and a licensed 1031 facilitators are good team members with your Realtor to see if this type of option is a good one for you.

Some basic rules of a 1031 include the need to identify up to 3 potential destination properties within 45 days of closing your initial sale transaction and an the absolute of having all purchase transactions closed within 180 days of closing the transaction.

It is also required that the acquisition price of the exchange property or properties exceed the sale price of the property that is being exchanged.

The 1031 exchange must be disclosed in writing within the connecting transactions.

In an exchange all money must flow through a licensed exchange facilitator.

Eugene's Alternative is versed in the ways of the 1031. We would be happy to consult with you further to see if this a good option to utilize in realizing your real estate goals.

Dave