All Forum Posts by: Peter Nikic

 Sorry, I can't help. I have no experience with this. Good luck. 

 My guess is that 1031 avoids capital gains tax on appreciation. So if you bought the land and sold it for more than you paid for it, then that would be the tax deferment amount when doing a 1031. 

Now if you build something on it, that's construction, I don't think it gets applied to the appreciation unless (possibly) if you kept it for a year or longer. 

There are 2 different taxable amounts, they'd need to be somehow pooled together. 

That's a great point for understanding what the 1031 is for.

In my case, value is not much different from where I am today (that $360k property is probably worth $3.6M). The benefit was that each time I bought a better property, otherwise I'd still be stuck in the same property. Every property had its benefits, but they were all stepping stones to better properties. That's why I say I'm not sure I'll ever sell the current property, it was built in 2018. This property just may be at the end of the 1031 line, most likely it'll go to my kids when I die.

Thanks @Dave Foster I'm happy to be a real life example of the 1031 benefits. I expect my next one to be $12-$15M. If I ever sell this property.

My increments were:

Buy - $360k, sell $475k (1994-1997)

Buy - $790k, sell $1.9M (1997 - 2013)

Buy - $2.1M, sell $3.6M (2013-2022)

Buy - $4.1m (2022)

Such a great way to use "all" of your sales proceeds. I've done it several times (same company) starting in 1997 with 1st 1031, then sold and did 1031 again in 2014, and now I just did it again in 2022. 

To give people an idea of how much growth can happen over time, the 1st property I bought in 1994 was $360,000. The last one I just closed on last month was $4,100,000. This all from an original $50,000 cash down payment investment. More than 11 times the original property price all with the same money. 

BUT it is very tricky, each time is a challange and very stressful. So as great as it is, it's also not very easy. The last time, I closed 177 days into my 1031, barely made it with just 3 days to spare!

 Great decision. Like @Jaron Walling said above, "There are no rules". Good luck and if things don't go as planned, change course. It's best when you have options. 

I'd go with painting panels. You can always replace one unit at a time if necessary or to see if it would make much of a difference. 

My suggestion since you're working full time is to get a NNN property w long-term lease. With $1m you should have enough to find something, somewhere. I recently looked at a Walgreens in TN, it was $5m, but by the time my property closed, it was already gone.

You can probably find something in the $3m - $4m range. Best thing is that it doesn't have to be local and you don't have to spend any time managing it. 

Otherwise with today's interest rates and bank restrictions and property management fees, you'd be limited to $2.5m - $3m in order to cover expenses. This would maybe net you more in cashflow, but it will come with more time and problems. 

Good luck.

I'm currenty going thru same, had to get an additional umbrella policy. 

Find a good insurance agent, they'll find the insurance companies and quotes for you. I don't know any in your area, but I just got a policy on a new construction bldg for under $400 per unit.