Looking to execute my first 1031 exchange

[Vladimir Kotomin]

Hi all, I am Vlad. Looking to sell two properties in Milwaukee (bought in 2010 and 2015) and to do either a 1031 exchange (likely into a DST) or to reinvest the gains into an OZF. Interested in finding DST sponsors that sell directly and thus reduce the front-end load.

[Dave Foster]

@Vladimir Kotomin, with your time horizon and expertise, you're looking at the two most common replacements for a 1031 - DSTs and if you don't want the DST then an OX investment. A couple other types that may be worth looking into

1. A totally managed vacation rental - think ski condo in a central managed destination.  Or a condotel again with central management.  The centralized management does cut returns.  But in exchange you get total passivity.

2. Oil and gas royalties - a little know acceptable 1031 replacement opportunity.  Great for tax purposes.  And typically countercyclical to real estate.  So as this market slows down oil and gas are starting the heat up.

3. An out of the box thought - buy your next primary residence or retirement house.  Treat it as investment for a few years.  And then sell your current primary - take that money tax free to pay for college.  And move into your former investment property.  Converting from investment to primary does not trigger the tax.  You get the tax free money needed for tuition.  You can start down sizing.  And if you live in that former replacement the right amount of time you'll get to take a prorated amount of that gain tax free as well.  

Food for thought