Will Coleman and Mike Taravella Interview Paul Moore of Wellings Capital.
Key Information:
1031 Exchange: A swap of one investment property for another in order to defer capital gains and appreciation recapture taxes.
Pros:
1) Capital gains tax deferment
2) Higher leverage to be used on a new investment property
Cons:
1) A timeline of 45 days to find a replacement property following the sale of a property.
2) Complete compliance with strict rules and regulations associated with the 1031 agreement.
3) Lack of negotiating power during acquisitions.
Common 1031 Myths: You must have equal equity and debt for the next deal, following a sale. You must hold a property for two years.
Delaware Statutory Trusts (DST): A syndication which satisfies the terms and conditions of a 1031 exchange.
The downside of DST’s is the lack of control over the investment, the restrictions on investing in high value add assets, and the high commission and fees charged.
Expert Pro Tip: “Understand the difference between investing and speculating”
Contact Information:
Wellingscapital.com
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