Accumulation of Wealth through the Ownership of Real Estate Asset
arising out of a "Deferred Exchange" under Section 1031
In order to formulate a wealth accumulation strategy, investors evaluate the project's free cash flow as well as compare financial indicators including gross schedule income, gross rent multipliers, capitalization rates and cash on cash returns. Thereafter, investors are prepare to execute a real estate purchase agreement, identify an accomodator and re-invest their proceeds on a replacement property.
A 1031 real estate exchange is a way to defer income taxes on investment property. Investors will have to pay income tax eventually. The 1031 exchange allows them to defer the tax payment until later, thus this allows clients to build wealth.
Our organization is prepared to represent clients who plan to execute "1031 tax deferred exchange transactions". Frequently, exchangers choose to have their replacement real estate lined up before they close on their relinquished income property. Residential, Commercial and Industrial Real Estate Investors need to identify their 1031 Exchange Replacement Properties within 45 days of closing sale on the real estate asset they are selling. Further, the replacement property must be received and the exchange completed no later than 180 days after the sale of the exchanged property.