What Is “Exchange Insurance” and How Can It Be Used?

By R.W. Bowlin

Real estate investors regularly hear the adage “money is made on the buy” preached by fellow investors, brokers and experts alike. If so, how does it make sense that market conditions can both simultaneously support the sale of a property and an exchange into a similar property? Logically it seems that either the market supports a sale or a purchase but not both. Simply put, how can you expect to make money trading apples for apples? 

Why Consider Exchanging In To Delaware Statutory Trusts (DSTs)?

By R.W. Bowlin

Investment real estate presents a tremendous opportunity for individuals to grow their net worth through time, value-add work and smart management. We have worked with dozens of clients who have acquired and managed multiple investment properties while maintaining their day-jobs. Ultimately, these real estate holdings end up serving as our client’s “Personal Property Pension Plan,” providing them financial security and funds to live on during their retirement years.

Investors Must Monitor Risk

By R.W. Bowlin

Successful real estate investors pay close attention to risk. Risk can be defined as the measure of uncertainty that an investor must take in order to realize a gain from an investment. Without risk, there is no opportunity for gain; however excessive risk, without a greater opportunity for gain, can tip the scales on an investment. Most investors are good at assessing risk when evaluating a transaction. The tricky part about risk is that it is fluid. All real estate ownership presents risk and an existing investment’s risk profile can change quickly. Staying on top of risk assessment is crucial to preserving your appreciation and protecting your returns. The following is a sample of the particularly relevant risks many of our multi-family clients are monitoring in the current market environment:

Are 1031 Exchanges Going To Be Eliminated From The Tax Code?

By R.W. Bowlin

IRC 1031 exchanges have nearly a 100-year history as a part of the Internal Revenue Code. While tax-deferred exchanges have been available since 1921, their longevity does not make them immune from the current tax reform debate. President Trump has identified tax reform as one of the first-year legislative priorities, with a target date of August 2017.

Extracting Liquidity While Deferring Taxes

By R.W. Bowlin

Often owners of investment real estate find themselves in situations in which they are “property rich and cash poor.” Thus, when contemplating a tax-deferred 1031 exchange owners often ask about ways to “unlock” equity in their property and receive a cash distribution from the exchange proceeds while still deferring tax.

Property Co-Ownership and 1031 Exchanges

By R.W. Bowlin

Co-ownership structure issues are one of the most common stumbling points for 1031 exchanges, however this need not be the case. With proper understanding and planning, most co-ownership structures can be worked through to satisfy the co-owner’s respective investment objectives. 

What Constitutes a Like-Kind Exchange?

By R.W. Bowlin

1031 exchanges are a popular tool among real estate investors since they can be utilized in a variety of situations – all of which allow for tax deferral. Internal Revenue Code § 1031 states: “No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.”

Education Series for Owners of Investment Real Estate

By R.W. Bowlin  

The 1031 exchange is one of the most effective ways for investors to maximize their investment real estate strategy. 1031 exchanges can be applied in numerous ways to facilitate portfolio growth, cash flow, diversification or many other objectives investors pursue. Unfortunately, 1031 exchanges feel opaque, complex and daunting to many investors, therefore this important planning tool is often overlooked by property owners. 

When Government Takes Private Property: Using the 1033 Tax Deferred Exchange

By R.W. Bowlin

Though necessary to accommodate the “public good”, privately owned properties are often acquired through legal condemnation or are requisitioned through a governmental exertion of “eminent domain”.  These are properties located in the way of civic works projects, like light rail, schools and roadway expansions.  When this action is taken, property owners are forced to sell.  This often provokes a tax liability as the property owner is then taxed on capital gains and depreciation recapture resulting from the proceeds paid for the relinquishment of their property.

How To Start Your Own Rental Property Business

By R.W. Bowlin

If you have the personality, the skills (or can learn them), the commitment, some cash and time, owning investment real estate can be an excellent way to create, and preserve wealth. One can do this complimenting their “day job“ or they can do this as a full time pursuit.