Updated over 3 years ago on . Most recent reply
1031, then pull equity
Help me with this idea. Maybe it is a good idea and maybe has pitfalls I am unaware of.
I have a property I own almost free and clear. Have owned it for sometime. Looking to sell it for $1.3 mil.
I have a project I am looking to develop in Mexico.
I don't really want to take a 30% hit on the cap gains tax, but yet need funds to develop the Mexican project.
Can I 1031 into another property in the US (apartments, storage units, etc...), then turn around and borrow as much equity as possible in order to fund the Mexico project (guessing 75-80%)
Thoughts?
Thank you in advance.
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- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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@Cor Bay, That's a perfectly valid approach. Very similar to what a lot of our clients are doing to move into passive syndications. They will do their 1031 to reposition their asset for long term. And after the 1031 d a refinance and use that money to invest in LP syndications.
The 1031 doesn't work to purchase membership interests in an LP. Just like 1031 doesn't work to sell in the states and buy in Mexico. You're contemplating a well trodden path. Kudos for the creative thinking
- Dave Foster
