All Forum Posts by: Joshua Wright

Definitely consider a 1031 exchange. Being from the Midwest, I’ve seen a lot of these the past few years with farmland. You can defer the tax. Hook up with a good Qualified Intermediary. The two mentioned in the prior post are very reputable. Other things to consider - do you need cash flow, do you need cash out of the sale (which will be taxable, but could do a partial 1031 exchange), what will you buy as replacement property on the other side, do you want to manage real estate on the other side or have totally passive real estate... If you’re considering an exchange, want to be hands off, and are an Accredited investor, you could exchange to a DST (Delaware Statutory Trust). This is the space I work in. If you want to manage property though, you can definitely go that route as well. Really depends on what our goals are, but a 1031 exchange can definitely fit.

Rob Willhite There’s a good interview with the founders of Roofstock on the Meb Faber Show podcast. It’s episode 63. You might check that out. Has some good info, history, etc on the company. I personally haven’t used them, but have been considering it.

Only place I know of would be to go to the individual sponsor websites and pull returns.

Can’t 1031 to annuity. If seller portfolio is US based, he can’t 1031 to property outside of US. If he’s accredited, he could 1031 to DSTs here in the states, defer all his taxes, and just collect a check off of passive real estate from the DSTs. Then he can move back home country and still be getting his monthly income. He would have to be aware of currency risk / conversion rates, but it might be much better deal than paying taxes. Food for thought.

John S. If you don’t want to go the management company route and are comfortable with going passive, check out DSTs (Delaware Statutory Trusts). DSTs would allow you to diversify both geographically and by property type. At the dollar amount you mentioned, you could easily put together a portfolio of DSTs. Dave Foster is right - value is definitely in the cash flow and leases with high quality tenants. Nothing wrong with going direct investment route either. But I would definitely want to have boots on the ground and good feel for the management company you would work with. You have to be Accredited to invest in DSTs by the way - $1m net worth excluding your personal residence or alternatively you meet certain income requirements. Message me with questions. Good luck 👍🏼

Nothing wrong with going all passive in my opinion unless you really want to manage property. I’d definitely diversify both geographically and by property type. If you’re Accredited, you can do this pretty easily through DSTs.

I agree with Dave. Not much you can do on tax in that situation, but if you were open to exchange - there’s definitely some hands-off investments you could check out. DSTs could be a fit for this (there’s a net worth or income requirement).

I agree with the other person that commented. I don’t know much about these Opportunity Zones, but you don’t want to get past that identification window if it doesn’t work. Do you know for sure they’re exchange eligible? Be sure to list some back up property on the exchange. Check out Delaware Statutory Trusts as a backup. I use these with folks all the time.

If you want to get truly hands off and still defer tax, check out Delaware Statutory Trusts (DSTs) as an option. They’re passive entities that hold institutional investment real estate, they’re 1031 exchange eligible, you get all the normal benefits of real estate (income, depreciation, etc), but they’re completely hands off. You’ll find all kinds property types in them. I’ve been seeing a lot of multi-family, medical office, self storage, and NNN in them lately (working with a portfolio right now full of Walgreens, Costco, etc). They don’t fit everyone, but I use them a lot with folks hitting a point where they just want to get hands off with their real estate, but not pay tax. Fit well in certain situations. Message me if you want more info. Best of luck.

Moses Berkowitz Their are qualifications, but you could potentially do a Delaware Statutory Trust (DST) as a backup if you aren’t able to locate replacement property in time. They are passive entities that hold institutional investment real estate and are 1031 exchange eligible. You get all the same benefits of real estate (income, depreciation, etc), defer your tax, but it’s hands off. I use them with lots of folks who are in the same exact situation you are. Message me if you want to chat more about it. Happy to help.