Six Passive Strategies for Replacing Your Rental Burden

There are far more owners who want to sell their rental properties than are currently listing them for sale. Why do they—or perhaps you—continue to hold properties they no longer want to operate? Common reasons include: • Unsure or afraid…

Six Passive Strategies for Replacing Your Rental Burden

Source

0
(0)

There are far more owners who want to sell their rental properties than are currently listing them for sale. Why do they—or perhaps you—continue to hold properties they no longer want to operate? Common reasons include:

• Unsure or afraid of tax consequences
• Unwilling or unable to qualify for a new loan
Discomfort in owning outside a local market
• Procrastination/dread of another transaction
• Fear of inability to find a similar or better property

As it turns out, for many people there are strategies that may address these concerns. Under §1031 of the Internal Revenue Code, you can defer—and potentially avoid altogether—your taxes when you sell your current rental, and invest in one of these passive replacement options:

1. Conventional DST (Delaware Statutory Trust)
Fractional beneficiary interest in a portfolio of multifamily or commercial real estate

2. DST-to-UPREIT
Ultimately invest in a large REIT portfolio of diverse commercial real estate, potentially with quarterly redemptions, after an initial investment in a single DST property

3. “GLIDE” DST (Ground Lease Interest in Development)
Long-term ground lease in which the tenant pays rent while developing the property, with the intent to buy back the fully leased-up property

4. Oil and Gas Interests
Basket of fractional interests in multiple properties producing oil/gas royalties

5. TICs (Tenants in Common)
Direct fractional interest, on title, with up to 34 other investors in a managed property

6. Single-Tenant NNN-Lease Retail or Restaurant
Common structure for owning stand-alone fast-food or other chain retail stores

Many of these programs offer pre-arranged financing requiring no application or qualification from investors. Most include an objective to provide potential income. The first four options require no escrow process to invest, and all but the last option require that investors be “accredited”.

To learn more about passive replacement options for 1031 exchanges, please visit our website at 1031capitalsolutions.com or give us a call at 1-800-445-5908.

0 / 5. 0