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All Forum Posts by: Pixel Rogue

Pixel Rogue has started 40 posts and replied 135 times.

Post: 1031 Exchange into a Fund Like the Ones on Fundrise

Pixel RoguePosted
  • PA
  • Posts 135
  • Votes 19
Quote from @David Sillaman:

But if you have 1031 and sold the property and are thinking about either rolling into another 1031 or looking at Opportunity Funds. Opportunity Funds will end up being the biggest winner.

Why?

Now that we are in 2025 - time for a reboot.There appear to be a few crowd sourced funds that support 1031s, some that go as far as even supporting debt carried forward (ie. mortgage.) Will admit the calculations shared on how debit is supported seemed a bit complex and hocus-pocus numbers.)

So in 2025 (lets say 2026,) what are the best ways to for landlords to step back from being a maintenance person without getting beat up in the process? Tax obligation is expected, it is matter of minimizing and smartly planning for taxable events. 

• Outright sale: Depreciation recapture risk increases w/length of time property was owned. Rules shift such as length of ownership and primary residence planning.

• 1031 straight & Reverse - endless merry-go-round always getting larger. BBBD
• 1031 delayed - park funds w/developer for future play

• DSTs (support 1031s, returns seem rather low and relevant investment details seem proprietary, non transparent. Might need 1m minimum to benefit.

• Crowdsourced Funds, they have been around now supporting 1031s for a few years - has anyone done these? I understand they work, yet have short timelines requiring reinvesting every 5-8 years.
https://www.goodfinancialcents.com/my-fundrise-returns-is-fu...

• Syndicates 

• Opportunity Funds ~ only need to invest proceeds, not principle, of earlier investments.
Quote from @Henry Clark:


Early in my REI. Did a reverse 1031. Was able to use our existing property as leverage on the new property thru the same bank.

Bought the new property at auction, thus the purchase had a set timetable.  

Our property went under contract.  Burned up time.   Found out the buyer did not get financing. Did a quick auction on our property. 

1.  Validate buyers.

2.  As mentioned have a second plan.  

God watches over idiots.  

Bought the original land for $1,100 per acre.

Auctioned it off for $3,000 per acre 5 years later.

Bought at auction the new property at $7,000 per acre.

12 years later subdivided and sold for $50,000 per acre.  

Kept one lot so we could go fishing on the pond we built there.  


 Show off!! 

Just kidding, that was pretty amazing and inspirational....

Quote from @Kevin Sobilo:

@Mike Auerbach, or simply buy the replacement property BEFORE selling your existing property. This is referred to as a "Reverse 1031 Exchange".

However, keep in mind that in some states including mine (PA) that you get hit with property transfer tax twice. Once when the replacement property is purchased and held by the 1031 Intermediary in an entity for you and once at the end when its finally transferred to you. I don't believe most states do that, but ask those questions of your intermediary if you consider this. 


 In PA, this also has additional costs in addition to the 2x transfer tax, costing apx. 10k by the done everything is said and done.

Anyone have insight and can translate the following into the layman English?


The below is in support of dissolution of an AOS - 

  1. The Set. Agr. Should include a general release.
  2. The Set Agr. Should expressly terminate the AOS reserving Seller’s remedy for buyer default.

Post: 1031 > Concert to Primary Home

Pixel RoguePosted
  • PA
  • Posts 135
  • Votes 19
Quote from @Bill B.:

I don’t think you want to try the fund sites. Their plan is to sell in 3-5-7 years and capture the gains so they can cash in. Then you’ll be forced to start over. 

Try a different market or property type? Are you using a PM? I only have a dozen properties but I spend less than an hour a month and half of that is accounting because I like doing it. I might have 4-5 repairs per year. (1 every couple years per property.) But 2-3 of them are under $250 and I never even hear about them other than the fact they are fixed. Most tenants stay 5-10 years so there’s almost zero vacancy. 

I bought SFR under 20 years old in a market with no damaging weather, stucco siding, and tile roofs for basically zero exterior maintenance. Then I picked a solid PM. I think that's key to being a landlord long term. I've only got 25 years in so far. But I find it more boring than tiresome. There's nothing to do.

I can’t sell them, my life wouldn’t become any easier. I’d just be giving up my freedom and a boatload of tax deductions. 

PM = Property Manager? If so, explored the option a few times over the years. Think best rate I was finding was about 7% which only included rent collection, the easiest part of the job. Repairs = extra (at u defined captive audience rates,) turn overs at the usual 1x monthly rent  Legal needs = all extra. Didn’t seem cost effective.  Most are single unit condo style, and one 4 unit building. 

SFR = ?

Post: 1031 > Concert to Primary Home

Pixel RoguePosted
  • PA
  • Posts 135
  • Votes 19
Quote from @Jules Aton:
Quote from @Pixel Rogue:

This depreciation recapture is a beast.

We do not want to be landlords forever, wearing maintenance hats and dealing with the day-to-day. Seems like owning them for so long was a mistake. If we simply sell outright the gains, I’d any, will be miserable and essentially toss away decades of work,


how else do people off load these investment properties (didn’t care the the DDDD strategy.)


Has anyone 1031’d into credit sited funds (think crowd street or other funding platforms that accept 1031’s?)


 Really important not to let the tax tail wag the dog. You have made decades of rental income and appreciation. Sell them, pay Uncle Sam and enjoy your much deserved retirement. 

I have done 90% of everything solo, and couldn’t even provide myself minimum wage based on the rules. Rental income was to keep it going and a little equity each year. To sell and net very little would result in a 20 year failure. Especially if mapped against opportunities such as even the basic S&P500.

Post: 1031 > Concert to Primary Home

Pixel RoguePosted
  • PA
  • Posts 135
  • Votes 19

This depreciation recapture is a beast.

We do not want to be landlords forever, wearing maintenance hats and dealing with the day-to-day. Seems like owning them for so long was a mistake. If we simply sell outright the gains, I’d any, will be miserable and essentially toss away decades of work,


how else do people off load these investment properties (didn’t care the the DDDD strategy.)


Has anyone 1031’d into credit sited funds (think crowd street or other funding platforms that accept 1031’s?)

Post: 1031 > Concert to Primary Home

Pixel RoguePosted
  • PA
  • Posts 135
  • Votes 19

thank you for the summary, as I forgot about a few of those points. All properties have a minimum of 5 year ownership. 

Depreciation is the kicker.

On the forever home, the 1032 would be through a multiunit we have had for twenty years - heavy depreciation. Depreciation is the one key factor why we would convert home to primary residence after a few years. Depreciation rolls all the way back to 2005.

In the second example, we are looking at at the following:

Multiunit purchased in 2004 > 1031’d into investment condo purchased in 20019. So depreciation reaches as far back as 2004. 


so the concept would be to wipe out depreciation recapture by having each as primary residence for 2 years (Pia to move every two years mind you.) 

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