A Few Wealth Building Details

How do I lower my mortgage payment?

Our office has several loan programs that can lower your payments and allow you to pursue other investment avenues.

The Section 1031 Exchange

What is a Section 1031 Exchange?

Section 1031 of the Internal Revenue Code allows for Taxpayers to defer capital gains taxes when disposing of investment property.  This "exchange" of one investment property for another is tax-deferred, which can give the investor greater buying power and ultimately enhance the investor's porfolio.  The key is using all the proceeds to purchase a like-kind replacement property to avoid paying federal income taxes.

What is required for a 1031 Exchange?

• The property must be Like Kind
• There are Reinvestment Requirements
• There is a Specific Time-Frame - 45/180 calendar
• There are Exchange Property Identification Rules
  
  Three-Property Rule
  The 200% Rule
  The 95% Rule
  
• There is a Suggested Holding Period - 2 years ( Please check with your accountant)
  
• You must use a Qualified Intermediary

Benefits of an Exchange

• Greater buying power when choosing the Replacement Property
• "Interest - free loan" from the IRS
• Equities from several properties can be consolidated into a single more efficient property
• Management-intense properties can be sold and replaced with more manageable properties
• Property owners who move to a new geographic location can relocate their equities
• Opportunities for "Tenants in Common" purchases

Types of Exchanges

• Delayed Exchange - sell relinquished property first
• Reverse Exchange - Purchase new property first then sell relinquished property
• Simultaneous - both Relinquished Property and Replacement Property close and record on the same day
• Construction, Improvement, or Built-to-Suit Exchange
• Personal Property Exchange

Specific verbiage must be on the seller and buyer's contracts