Should I Do A 1031 Exchange?

Should I do a 1031 exchange? What are the alternatives?

If you have decided it is time to sell, the big question is: ” What now?” There are a number of possibilities:

1) Exchange into a larger or smaller property (depending on where you are in your investment career).

2). Invest in a triple-net leased property. With these properties (such as a Wendy’s or a Taco Bell or even a Walgreens), the tenant is responsible for all costs expenses, and repairs. The downside can be if the tenant leaves for any reason, you may have a difficult time replacing the income and you would assume expenses such as taxes, insurance, and maintenance.

3) An Installment sale could allow you to be taxed on the gain in different tax years. Your CPA can advise if this is right for you.

4) Delaware Statutory Trusts and UPREITS. These are group investments that offer differing amounts of liquidity, cash requirements, and safety. Check with your Real Estate attorney before investing in either of these.

Always check with your CPA, and your own legal counsel before embarking on a new investment strategy. It took you a while to get where you are, and you do not want to jeopardize that. We are Real Estate brokers and can’t give legal or accounting advice.

What we at PRS PROPERTIES CAN DO. We can discuss with you the current rents in your area and supply you with comparable rental prices for similar properties. Before you hire a manager, make sure the compensation is fair to you! We can also look at your building for changes that might allow you to get a higher value in order to create value without huge expenses for your building. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We always have many investors who are looking for “as-is” properties and are willing to purchase with low rents, a moratorium, or even with a problem tenant in place. We have put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are in 1031 exchanges and need to identify a replacement property before their 45-day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted, and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.

Remember – KNOWLEDGE IS POWER!