Do you give up your better interest rates to do a 1031 exchange?

Tacoma, WA · Member since 2016 · 41 posts · 16 votes

If you had a duplex rental property with a great interest rate on its loan but you have the opportunity to sell it on a 1031 exchange to put down 20% on a great deal on a 4plex but the catch is the new (worse) interest rates, do you do it if you have 1% rule kind of cash flow anyway?

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Dave FosterBusiness Member

Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes

@Angela Jossy, Interest rate is only one of several metrics you need to use to figure out what's best for. A higher interest rate for a property that has greater appreciation potential, less capital expense exposure, better cash flow...Sure I'd do it. Like @Mike Dymski said, it's about the net impact not the interest rate.

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
4y
Yes, if the total return is higher.
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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
4y
@Angela Jossy, Interest rate is only one of several metrics you need to use to figure out what's best for. A higher interest rate for a property that has greater appreciation potential, less capital expense exposure, better cash flow...Sure I'd do it. Like @Mike Dymski said, it's about the net impact not the interest rate.

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Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
4y
@Angela Jossy yes
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