questions about 1031 Exchanges answered
Your Questions About 1031 Exchanges
What is a 1031 exchange?
3 Fundamental Qualifications
Reinvest The Proceeds Into A Like-kind Investment. Doing this would defer paying capital gain taxes. For example an investor can exchange a commercial property for another, or a residential rental property for a commercial property, and vice versa.
All Proceeds Must Be Reinvested. The value of the replacement property must be equal to or greater than the value of the relinquished property to qualify for full deferral of capital gain taxes.
Titles Must Be Identical. The ownership title for the replacement property must be identical to the title for the relinquished property.
What are the identification rules?
(WITHIN 45 DAYS FROM CLOSING THE RELINQUISHED PROPERTY)
You can identify an unlimited number of replacement properties, as long as the total fair market value of all investment properties does not exceed 200% of the value of the relinquished property.
3 Property rule
You can identify up to three different properties regardless of the total fair market value of the properties and you may acquire one, two or all three of these investment properties.
You can identify more than 3 properties with total value more than 200% of the value of the relinquished property but you must acquire at least 95% of the value of investment properties identified.
What are the benefits of triple net lease Investment?
Zero Landlord Responsibility
No Management Required
With triple net lease the tenant is responsible for ALL property expenses associated with the building. These include property taxes, building insurance, repairs, maintenance and utilities.
As a landlord and net lease investor, You have ZERO responsibility in managing the property. This shields you from the management overhead and headaches that are usually associated with active management assets (e.g., multifamily). With Net Lease you have full control on how you want to spend your time, enjoy the passive income and your financial freedom.
Long Term Leases
Predictable Cash Flow
National Credit Tenant
Triple net lease (NNN) assets have long-term leases spanning from 10 to 25 years. These leases can contain several lease renewal options bringing total lease horizon up to 30 to 50+ years.
Net Lease investment is also referred to as Mailbox Money due to its bond-like revenue streams and predictable, stable return. On top of this you also have lease guarantees which could make it a ‘no-brainer’ for those seeking passive income and hassle-free lifestyle.
National triple net lease tenants such as Walgreens, CVS, 7-Eleven, Dollar General, Starbucks all have very strong investment-grade credit ratings vetted by Moody’s and S&P. These net lease tenants all have corporate guaranteed leases. While no investments are completely risk-free, with careful planning and execution, as Net Lease Investors you can reclaim your time, pursue your passion and enjoy your freedom.