All Forum Posts by: Lauren Speidel

@Warren Johnson I understand. Let me know if I can help in any way, even if you just want to toss around some ideas in the future!

@Beth Chang A 1031 Exchange can be a very powerful tool for someone who is interested in growing their wealth through real estate. As mentioned above, speaking with your CPA about your tax liability is extremely important when deciding if a 1031 Exchange makes financial sense. Keep in mind you could always do a Reverse Exchange which allows you to buy your replacement property first and then you have 180 calendar days to sell your current property. Just a thought...

@Warren Johnson A Reverse 1031 Exchange can be a powerful tool if you have already found your replacement property but have not yet sold your relinquished property. Typically the QI would buy the replacement property on your behalf and park title to that property until you sell your current one. One of the largest hurdles is securing financing to purchase your replacement if you don't already have the funds available to you. Timeframes with a Reverse Exchange are the same as a Forward Exchange; you have 45 calendar days after you close on your relinquished to identify what you are selling and another 135 calendar days to actually close on that sale. Also keep in mind when you sell an investment property, most taxpayers pay around 30%-40% in taxes. Your capital gain tax is usually between 15-20%, you then have state tax, possibly Medicare surcharge at 3.8% and depreciation recapture at 25% so I would be mindful of those numbers as you execute your sale. Also, the broker's commission you pay is considered a permissible selling expense, therefore it will reduce your overall net sales price which means you're not taxed on that amount and it does not need to be replaced for a fully tax deferred Exchange. Reverse Exchanges are more complicated and have more moving parts so I would be aware that the cost to complete one is more expensive than a typical Forward Exchange.

@Account Closed Unfortunately, you can't sell a property in the states and buy a replacement property in Puerto Rico. Puerto Rico properties don't qualify for Exchange treatment. Property located in U.S. Virgin Islands, Guam and the Northern Mariana Islands are considered like-kind to U.S. property.

@Ryan Hammond

In order to complete a fully tax deferred Exchange you would need to trade equal or up in value based on your net sales price and that means reinvesting all of your equity. Anything you do not replace may have tax liability because unfortunately, the IRS taxes the gain first.

One option could be to purchase your replacement, trading equal or up in value, then waiting a few months to complete a cash-out refinance and then use those funds to purchase more investment properties.

I'd be happy to discuss your transaction if you're interested.

@Scott P. I am the Business Development Officer for Exeter 1031 Exchange Services and cover the Midwest. I was just recently in Michigan and will be back there again soon should you be interested in meeting. I'd be happy to discuss your transaction! Please let me know if you'd like to connect.

 @Matthew Perry Congrats and good job for doing your research!

@Cam Jimmy With a 1031 Exchange, there are many roles that are vital to the transaction. A Qualified Intermediary really should be an independent third party that has an arm's length transaction with the client. For example, if you are working with an attorney and they're providing legal advice it's best to not use that individual as your QI.

@Brie Schmidt Thank you for the mention! @Roger R. You’re absolutely correct. The QI world is unregulated and it’s important to make sure the company you choose is insured and bonded and has the experience and expertise to assist you.  I’d be happy to discuss Exeter 1031 and the benefits of using us as your Qualified Intermediary. 

@Joel Falk A tax strategy that may work for you, is a 1031 exchange. With a 1031, you are able to sell your property, defer the tax liability and have your full net sales price working for you in another property. One of the requirements when completing a 1031, is your intent. If you have the intent to buy a property, update it, and sell it, then a 1031 may not be the answer for you. With this example, your intent is to sell. With a 1031, your intent should be to hold. Therefore, if you've got time on your side, you could purchase a property, update it, rent it for 12-24 months to prove you had the intent to hold for rental income, and then sell the asset and defer your tax liability. I am located in Aurora, so not too far from you, if you'd like to set up a time to chat or meet.

@Joshua Wright Thank you for the kind mention. @Matthew Nye I am Exeter's Midwest Region Business Development Officer. I'd be happy to set up a phone call or meeting to discuss your transaction further.

Thank you!