Choices of Replacement Property for 1031 exchange

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Choices of Replacement Property for 1031 exchange

Maria A A.
Investor · Reno, NV · Member since 2017 · 105 posts · 15 votes

Aside from real estate investments & crowdfunding what are other good & flexible (i.e. not long term hold) options to consider for replacement property for 1031 exchange?

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Bill ExeterBusiness Member
1031 Exchange Qualified Intermediary · San Diego, CA · Member since 2008 · 1k+ posts · 1k+ votes
9y

Hi @Maria A A., 

There are a number of options that your Qualified Intermediary should be able to provide you.  They include: 

  • Locating and acquiring your own rental, investment or business use property through a licensed real estate agent
  • Purchasing a net lease property such as Walgreens, CVS, fast food restaurant stores, coffee shops, etc. 
  • Buying into a syndicated Tenant-In-Common Investment Property (TIC)
  • Purchasing a beneficial interest in a Delaware Statutory Trust Investment Property (DST) @Leslie Pappas can address these in greater detail. 
  • Investing into an upREIT (also referred to as a 1031/721 Exchange).  The up refers to Umbrella Partnership (often referred to as Operating Partnership). 
  • Buying into certain types of oil and gas interests
  • Purchasing mineral rights
  • Investing in water rights 
  • Purchasing air rights 

The above list provides you with the more common and the not so common options.  

Exeter 1031 Exchange Services, LLC and Exeter Trust Company4.726 Reviews
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  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    Um well.....

    A 1031 exchange can only be used for investment ie: long term hold....

    You can exchange into any like kind...which means...real property...it can be apartments, single family, storage units ect....

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  • Jim Groves
    Lender · Chicago, IL · Member since 2015 · 191 posts · 86 votes
    9y

    RE: the "long term hold", the whole point of the 1031 is to delay the cap gains for the long term. Eventually you will need to pay the tax.

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  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    That's not true. 

    You can 1031 until you pass on the property. 

    You can 1031 into a DST for passive income.

    If you never sell without a new 1031  you never pay the gains. 

    Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
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  • Bill ExeterBusiness Member
    1031 Exchange Qualified Intermediary · San Diego, CA · Member since 2008 · 1k+ posts · 1k+ votes
    9y

    Hi @Maria A A., 

    There are a number of options that your Qualified Intermediary should be able to provide you.  They include: 

    • Locating and acquiring your own rental, investment or business use property through a licensed real estate agent
    • Purchasing a net lease property such as Walgreens, CVS, fast food restaurant stores, coffee shops, etc. 
    • Buying into a syndicated Tenant-In-Common Investment Property (TIC)
    • Purchasing a beneficial interest in a Delaware Statutory Trust Investment Property (DST) @Leslie Pappas can address these in greater detail. 
    • Investing into an upREIT (also referred to as a 1031/721 Exchange).  The up refers to Umbrella Partnership (often referred to as Operating Partnership). 
    • Buying into certain types of oil and gas interests
    • Purchasing mineral rights
    • Investing in water rights 
    • Purchasing air rights 

    The above list provides you with the more common and the not so common options.  

    Exeter 1031 Exchange Services, LLC and Exeter Trust Company4.726 Reviews
    WebsiteView Page
    1Reply
  • Leslie Pappas
    Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    9y

     Thanks for the shout out Bill. 

    Maria, I'm happy to answer any questions you may have about DSTs. By reinvesting in 1031-qualified DSTs, you purchase ownership interest in multimillion dollar properties that offer long-term income without having to be the landlord.

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