Creative ways around capital gains?

[Stephanie Martinson]

Hi everyone,

There's an apartment building that fits my value-add criteria in my hometown, and I know the owner. He says he doesn't want to sell because capital gains tax will get him... I'm assuming he's leveraged the apartments to a point that he may lose money if he were to sell. He has owned the apartment for around 10-15 years, and many people call them the crack-head apartments because they are pretty ran down.  

Any idea how to alleviate this capital gains conundrum? There has to be a creative way to purchase real estate that works around capital gains a little bit.  I thought about seller financing, but I don't think he's interested in that.  He would do a 1031 exchange, so should I start looking for apartments that aren't value add that he can buy in to and still cash flow?  I'm sure he's got a cash cow, and the deferred maintenance is adding up.  Any ideas would help!