All Forum Posts by: Brandon Bruckman

On question 1) No.  Once you hit the 45 day mark, your ID form is locked.  2) Yes.  You can change your ID form as many times as you want before the 45 day deadline.  

Play around with this calculator a bit https://www.ipx1031.com/capital-gain-estimator/

Agree with @Greg Scott.  Run this by your CPA so they can include your full taxable situation.  

On your first question, the yield quoted is on your equity investment.  The fees will come into play once the deal full cycles as a drag on total returns.  

Good post!  We did build a calculator for this.  The math is one part of the equation.  The other is your due diligence on the deal and sponsor / syndicator.  I'd argue that's more important than the math as the projections are just that projections.  

On DST, yes there usually is deprecation on deals. Your deprecation schedule follows from your prior properties.

You may want to look at syndicators that take 1031 money.  Might be best of both worlds. 

In an exchange, your depreciation schedule follows you.  If you acquired more property value, you can start an additional depreciation schedule or created a blended schedule.  I'd consult your CPA.  

Generally, 1031 exchange is a good way to unlock trapped equity given where rates are currently. 

What @Taylor L. said.  You have to start making plans for replacement property well before you sell.  Using TICs or DSTs as backup is a good plan too.  If you can put three properties on the sheet, do that. 

Track records are in every PPM.  Very easy to find.  

Agree with your comments on multifamily.  We see lower LTVs and a drift away from MF properties all together. 

This is becoming an interesting thread! I operate in the DST space. Here is some clarity on the more recent questions and comments:

- Upfront costs - pull a PPM and look at the use of proceeds.  All the costs are there.  

- Working with an RIA will reduce the upfront costs.  Shop around.  Pick out one you like. 

- DSTs don't turn over every 2-3 years unless there is significant appreciation. The average hold time of the largest DST sponsors since the inception of DST in 2004 is over 8 years.

- No one (RIA or BD) is taking an 11% commission.  Sales commissions in DSTs average 6%. 

These are good questions @Alton Johnson.  The QOZ funds will provide capital gains tax deferral until the end of 2026.  Then the tax bill is due.  After 10 years the gain on the OZ becomes tax free.

These funds do offer economics associated with the project.   Since most of these projects are ground up construction, you can think of the economics in that way. 

We do believe there are passive loss benefits associated with QOZs.  Its complicated and you will want to run that past your CPA.

The other option you mentioned, buying real estate and utilizing accelerated / bonus depreciation, could work.  Or you could consider a combination of both a direct investment and QOZ.  This is spreadsheet exercise and ultimately what you are most comfortable with.  

@Angela C. are you asking about managing an OZ project yourself or an OZ fund vs buying a replacement property in a 1031 exchange? 

Biggest negative / downside I hear from investors:

- Timeline. You need to work on your sale and replacement property at the same time.  Its time consuming. 

- Golden handcuffs.  Once you keep exchanging, your basis goes down, thus forcing you to continue to exchange.  If you don't want to reinvest in real estate later, the economics might force you to do so.

The decision comes down to how big is the tax bill and what do you want to do with your proceeds.  The "spreadsheet" decision says exchange forever.  But your life isn't a spreadsheet. It might make sense to pay the tax and take the money.