1031 Exchange into REIT?

[Dulce Beltran]

On Brandon’s post How to reach a Million Networth in 7/8 years (2012), Brandon mentioned in the comments an option once he really retired would be to sell his portfolio and do a 1031 exchange into a REIT. Would some please clarify as my understanding is only “like properties”

[Dave Foster]

@Dulce Beltran, I think it's much more likely that Brandon simply misspoke. While upreits and Syndications being sold into REITS can certainly happen as @Drew Reynolds explains, the most common vehicle to transfer real estate ownership from active to passive is using a1031 exchange to sell actively managed assets and buying passive structures that qualify for 1031 treatment.

The three most common are delaware Statutory Trusts, TIC (Tenants in common) structures under Rev proc 2002-22 or NNN leases. 1031 ing into these is relatively easy, due diligence of publically held companies much easier, and returns because of the tax deferral and added depreciation write off are much higher than paying the tax and investing in the market.