Mike Buckley - NJ Shore Real Estate Agent
Mike Buckley - Agent
I own many investment properties and am constantly learning new ways to invest or ways to save on taxes. The best vehicle a real estate investor can use to save on capital gains taxes is a 1031 exchange. For those who don't know, a 1031 exchange is simply selling one investment property and buying another of equal or greater value within 6 months, thus not having to pay any capital gains taxes on the profit. But what do you do if you can't find another property within the 6 months? I have been involved in many conventional 1031 exchanges, but have recently learned that there are a lot of ways to benefit from a 1031 exchange that is not conventional, but it is legal. There is a reverse 1031 exchange where you can actually buy the new property before selling the old one. There is also another option that is like a dream come
true for real estate investors. I just learned about this and have spoken with many experts on the subject. The best way to describe it is that it is like using the money from the sale of a home to buy into a real estate mutual fund. Actually, you are really buying an interest in an office building that someone else will manage and run for you and the other owners. You are an actual owner of the building and receive a deed. The company that manages it pays you a return that is usually between 7 and 11% annually paid out in monthly installments. The company buys buildings that are not fully rented but that have great tenants like big companies or the US government, so the risk is minimal. After they get the building fully occupied, usually 3 to 4 years, they sell the building for a profit and you make money on the sale also. Then you can turn around and do a conventional 1031 exchange, or invest in another building of this type. The company continually adds properties to it's portfolio, so you can almost always be assured that something will be available for you. There are also variations on the investment I just explained.
I have a very good friend of mine who is a financial advisor and can explain these investments in more detail. He can also set these investments up for you. He also has many other investments that can get you great returns and guarantee your principal. I never realized how many good investments there are out there until I sat down and talked with him. Give him a call, I can assure you that you will be glad you did. Just click below to go to his website.
1031 Exchange Alternatives