L A Boomer

[Jim Workman]

I'm Jim, and I came late to the REI party.

I bought my first investment property in late 2010. It is a triplex in Venice, CA which is 100% mortgaged and almost cash-flow neutral.

Now I want to 1031 that into 3 or 4 cash-flow positive properties out of state.

I started to go to FIBI meetings this year, and am learning some of the things that I should have known before I dove into property investment. That's where I heard of Bigger Pockets, and began listening to the podcasts. I had no idea that there were so many ways to invest.

Looking forward to learning from the pros.

[Bill Exeter]

@Steven Hamilton II is right on the money (as always!). We have coined (and trademarked) the phrase Zero Equity 1031 Exchanges as part of our educational material. It was designed to help educate investors through the recession that you might not have any equity left in the property (i.e. 100% financed), but you might have a taxable gain to worry about. It all depends on your adjusted cost basis. You can 1031 Exchange even when you have zero equity (or no equity). You still have to trade equal or up in value based on your net sales price. However, instead of reinvesting cash equity, you are merely reinvesting (replacing the old debt with new debt). You could certainly replace the old debt with out-of-pocket cash instead of new debt if you so choose, or trade up in value and add out-of-pocket cash.