This Little-Known Loophole Is Going to Change How You Invest

[Account Closed]

In other words, in your portfolio -- yes, yours -- you could own a piece of a high rise, a downtown office building, a 100-plus unit apartment complex and more.

Let's break it down.

1031 vs. 721: How the 721 can protect you

OK, so as awesome as the 1031 is, there are a few drawbacks. For one, you have a limited time period to find a new property, which could leave you in a vulnerable position from a negotiation standpoint. (A seasoned seller will smell this a mile away.)

You might not have a property available that fits your investment strategy, forcing you to either a) pay taxes, b) buy a less than stellar deal or c) overpay for one that does.

The fund hack: Diversification and high returns

Here's where investment funds come in.

They're widely available, many of them open-ended (meaning you can buy in tomorrow, next year, whenever) and you're not under the same pressure to find the perfect property.

In the past, private equity funds were generally closed to "accredited investors," a sub sector of affluent investors who -- perceive ably -- have more money and therefore must be more savvy. Basically it means you have to have a net worth of $1 million (minus your primary residence) or make $200,000 a year for the past two years.

All well and good. In reality, it really just closed off investments to those with money exclusively, allowing them to make more money.