Cap Rates: What is your NOI?

Cap Rates: What is your NOI?

If you have spent any time buying or selling commercial real estate, you’ve probably heard (or said): “I am a buyer at a [fill in the number] cap rate or higher.” But what does that mean? As we discussed previously, a cap rate is a basic method of evaluating risk and return. Real estate acquisition is as much an art…

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Back to Basics: What is a Cap Rate?

Back to Basics: What is a Cap Rate?

As real estate investors, we see the words “cap rate” often, and may even use it ourselves when comparing investments. But in fundamental terms, what does it mean, and why should we care? We could write a book on the nuances and advanced discussions, but for now let’s focus on the basics: Capitalization rates, or cap rates, is quite simply…

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1031 Exchange Rules – What You Need to Know

1031 Exchange Rules – What You Need to Know

When you’re thinking about participating in a 1031 Exchange, there are several rules you need to be aware of in order to meet federally mandated guidelines. Below you will find a few of the basic rules to remember. Qualified Intermediary  The primary and most important rule to remember when participating in a 1031 exchange is that taking control of cash…

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Section 1031 and Delaware Statutory Trusts

Section 1031 and Delaware Statutory Trusts

How many of us own rental properties that we keep for many years, yet have no debt liabilities, and have made few bucks from rental income? If you have read this far, you probably have. Now the bigger question for those of you who have sold investment property over the years is how many of you have sheltered your gains on…

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Tenant-in-Common Investing: A Replacement Property Solution

Tenant-in-Common Investing: A Replacement Property Solution

As individual investors embrace the benefits of real estate ownership, many have done so in various forms, including Tenant-in-Common investing. Everything from residential rental properties to raw land, apartment buildings and small strip centers. The common denominator in most forms of real estate ownership for the individual investor is that except perhaps for the raw land, all other forms of…

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1031 Exchange: Five Things You Should Know

1031 Exchange: Five Things You Should Know

In our previous posts, we’ve walked you through the basic steps of a 1031 exchange. As may know by now, Internal Revenue Code Section 1031, or as it is more commonly known, the 1031 Exchange, allows the exchanger to defer all immediate taxable liability indefinitely, as they sell one investment property for another within a defined period of time and…

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Trends Shaping Multi-Family 1031 Investments

Trends Shaping Multi-Family 1031 Investments

As a platform containing dozens of 1031 investments, we have certainly noticed a rise in the quality and quantity of commercial multi-family 1031 investments. What are some of the drivers, and what does it mean to your multi-family investment portfolio? We’ll explain a little in this post. Changing expectations: student housing We’ve seen the rate of students opting to live in…

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Are You Looking to Diversify Your Portfolio?

Are You Looking to Diversify Your Portfolio?

An investment in real estate or other real property can provide unique investment portfolio benefits to diversify your portfolio. Property owners often seek a steady stream of income, capital appreciation and property-related tax advantages. Yet some property owners may no longer be interested in actively owning and managing property, but still want an allocation in real estate. For those individuals,…

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Knowing Your 1031 Exchange Tax Deductions

Knowing Your 1031 Exchange Tax Deductions

By Guest Author Chris Miller  We all know that expenses are deductions from income tax. For example; if I buy a “widget” for $500,000 and sell it for $1,000,000, I won’t owe the IRS taxes on that $1 million, just on $500,000 ($1,000,000 gross proceeds – $500,000 cost = $500,000 taxable profit). However, many investors don’t know that similar “expense” tax deductions…

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Understanding the Terms When it Comes to a 1031 Exchange

Understanding the Terms When it Comes to a 1031 Exchange

When it comes to a 1031 Exchange, there can be a wide variety of terms used, which can get confusing at times. We’ve compiled a list of some of the basics: Sponsor: A person who directly or indirectly provides management services for a program. Boot: Any funds remaining in the form of cash or debt from the property sold. The…

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Value Requirements for a 1031 Exchange

Value Requirements for a 1031 Exchange

We’ve walked through the process of a 1031 exchange. Now, it is important for the exchanger to be aware of the value requirements for a qualified compliant exchange. The exchanger must make sure the value of the property to be acquired is in line with what was relinquished.  It is not necessary for exchange purposes for the values to be…

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Like-Kind Property for a 1031 Exchange

Like-Kind Property for a 1031 Exchange

We briefly mentioned like-kind property as we walked through the steps of executing a 1031 exchange. Now that the exchanger is aware of how to identify property and find a QI, the question turns to what the exchanger can identify since the base requirement is a like-kind investment. Understanding the finer points of how to execute a 1031 Exchange can often feel…

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Which of the Four Types of 1031 Exchanges Will You Do?

While 1031 Exchanges are an excellent tool for real estate investors, there are many IRS rules to navigate. It is wise to understand the complex nature of 1031 Exchanges. When executing a 1031 exchange there are four types to choose from. The first and original exchange type from 1921 is the Simultaneous Exchange. This exchange occurs when the real estate owner…

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Identifying Property for a 1031 Exchange

Identifying Property for a 1031 Exchange

You’ve selected a Qualified Intermediary and are now researching real estate investment options. Please keep in mind that there are many limitations when identifying property on 1031 Exchanges and you must follow the rules closely. There are three ways an exchanger can identify property with their QI using one of the following: the Three Property Rule, the 200% rule or the 95%…

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Finding a Qualified Intermediary

Finding a Qualified Intermediary

You’ve decided to sell your investment property, and you are pretty sure you want to do a 1031 Exchange. Now what? The first step before closing on the relinquished property during a 1031 Exchange is for the exchanger to retain a Qualified Intermediary (QI). It is important for the exchanger to do this before arriving at the closing table. The QI, otherwise…

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What’s the Reason for Federally Mandated Timelines and Deadlines for a 1031 Exchange?

What’s the Reason for Federally Mandated Timelines and Deadlines for a 1031 Exchange?

In order to properly execute a 1031 exchange, certain federally mandated steps must be completed. The first time period in a 1031 exchange is known as the Identification Period.  Beginning on the day the exchanger closes on the relinquished property, a 45-day clock begins to tick.  The exchanger will have 45 days to identify potential replacement property. So the day the…

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Executing a 1031 Exchange

Internal Revenue Code Section 1031, or as it is more commonly known, the 1031 Exchange, allows the exchanger to defer all immediate taxable liability indefinitely, as they sell one investment property for another within a defined period of time and by meeting certain federally regulated guidelines. How It Works: As amended in 1986, this section of the code outlines certain…

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How did this whole 1031 Exchange business start anyway?

Congress adopted the first income tax code in 1918 and in 1921, as part of the Revenue Act, the first tax-deferred like-kind exchange was authorized.  In 1954, an amendment to the tax code changed the section number to 1031, hence the name “1031 Exchange.” A series of court cases in the 1970s set the precedent for present day non-simultaneous exchanges….

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Sandlapper Securities launches new venture

Greenville-based Sandlapper Securities LLC has launched a new venture, 1031 Replacement Property Solutions, and its website, 1031RPS.com, as an online marketplace for investors to access available securitized 1031 replacement property options, primarily for use when executing a 1031 tax-deferred exchange.

SANDLAPPER Securities Launches 1031 Replacement Property Solutions

SANDLAPPER Securities LLC, a full-service independent broker-dealer and dealer manager of investment products, launched a new focused venture called 1031 Replacement Property Solutions that allows accredited investors to access an inventory of available securitized 1031 replacement property options primarily for use when executing a 1031 tax deferred exchange. The new website serves as an online marketplace where investors can browse…

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SANDLAPPER Securities, LLC launches 1031 Replacement Property Solutions (1031RPS.com)

SANDLAPPER Securities, LLC (“Sandlapper”) has launched a new focused venture 1031 Replacement Property Solutions and its website, www.1031RPS.com as an on-line marketplace for “Accredited Investors” to access an inventory of available securitized 1031 replacement property options primarily for use when executing a 1031 tax deferred exchange.

1031RPS Launches

Internal Revenue Code Section 1031 is one of the last great tax advantages that allows an investor to maximize dollars invested while creating an avenue for estate planning through the continued deferral of gains (or losses) in the real estate investing process. But with the good we have to accept the bad, and in the case of Section 1031 time…

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