Barry Mathis On The Biggest Frustration of Capital Gains Tax

[Brett P Swarts]

Brett Swarts:

Welcome to the capital gains tax solutions podcast. Also, stream on Expert CRE Secrets. I'm your host, Brett Swarts, my new friend here, Barry Mathis and we just got done viewing him in his full story, so much wisdom and so much information that you want to check it out right now on YouTube. It's also gonna be live on YouTube iTunes here shortly. But in this episode, we're just covering just the biggest frustration when it comes to capital gains tax deferral, the 1031. So Barry, what's the biggest frustration you, a client, or partner has faced when it comes to capital gains tax deferral and or the 1031 exchange?

Barry Mathis:

Well, I think stories are what matters. So I'm gonna jump into a story. I had a client that purchased a property he had saved all of his life, he's been in and out of different investments had done multiple 1031s. And he literally was at the, you know, the last leg, you know, he wasn't dead yet. But he was in his upper 70s, lower 80s you know, and so this was his get out of jail. He had sold a property in Oregon, where he was a property, part-owner of a park, a trailer park. And so he came down to Roseville, we bought an office building in Roseville. And so he was doing his 1031 exchange, he had been rolling it from time to time. And you know, this guy just did not want to pay taxes. That was just all there was to it. And we got into that 1031 and I've always been a little cocky, I'm a younger salesman at that point. And I thought why in the world would you ever need 180 days to close a property? Right? So why in the world? I mean, you got 45 days to identify, 180 days to close on it? Why would you ever need 180 days, I usually get things done in 30 days, or 45 days or maybe 60. Right. And so low and behold, we put up we identified that one property, we dropped our others were in that property and we're ready to go. And then in the middle of that transaction, we found out that the owner of the property, you might have heard this story, the owner of the property actually had embezzled a large amount of money from Sammy Hagar, who did a restaurant here in Sacramento with this gentleman, and the gentleman committed suicide. Well, Sammy Hagar, this is just my understanding. I did not personally talk to Sammy about this. But my the story I got was that Sammy Hagar had instructed his attorneys to slow down the sale of our property to slow down the sale of the office building, just to mess with the owner's family. And that's the story I got. I don't know if that's true or not. However, it appeared to be that was what was happening. And we took about 150 days, maybe 153 days, in order to get our transaction done because of those holdups. And hey, it scared me to death, scared my bad guy to death, he was going to lose a ton of money. So I would say the biggest challenge is inflexibility. You think you never need that much time. I thought I never needed that much time. But it almost cost my client a fortune. And so anything that will give you more options in that arena. Hey, I think that something you want to learn more about?

Brett Swarts:

Well, thanks so much, Barry. And yeah, we call it the shotgun wedding, right? You get engaged in 45 days, and you get married in 180 days. But sometimes, you know, the bridal parties aren't going to work out or things are going to change or time is going to change. And you never want to be caught with like Warren Buffett says, when the tide goes out, you see who's been skinny dipping, right? And the challenge becomes some of the stuff is out of your hands, right? You get caught in court, it can be alone, I did deal in Del Paso Heights for 15 units. And we literally closed on day one at I didn't sleep for a week. And part of it was we were assuming this loan for the client. He also was selling a mobile home park and reading and he was buying 15 units. And the challenge as it was one of these fixed loans with the government which typically means everything slows down. And so we had to assume the loan had huge yield maintenance on it. And I'm like with these guys month beforehand, hey, we got to close. We got to close we got to close. Anyways, we close on the day and I'm like, Oh my gosh, it worked out. But no one likes to work under that stress, right that fire drill. By the way, we have a backup plan now or an alternative called a deferred sales trust. In fact, we just say to Phil 1031 exchange out of Georgia was 128 units for a gentleman out of Northern California. And we saved his failed 1031 exchange without using one of his identification without doing a Delaware statutory trust using a deferred sales trust by the way go to capitalgaintaxsolutions.com to learn more about that. Barry, for those who want to learn more about you. where's the best place to find you?

Barry Mathis:

916-225-7777 shoot me a text I'll get back to you as soon as I can. And if you want to reach my website it's [email protected]. I apologize. That's my email. My website is brokerbarry.com.

Brett Swarts:

Perfect. Thanks. Thanks, Barry for being a part of the show. And thanks to everyone for listening. Take care. Bye

Learn more about Deferred Sales Trust
Visit: www.capitalgainstaxsolutions.com