All Forum Posts by: Dylan Speer

Hey Jacob, 

What are your plans with the property after a 1031 exchange?

Hey Matthew,

There are many DSTs that do not have a $500k or a $1m minimum. If your goal is to exchange into one, there are several options. The hard part is finding them - You would need a registered rep to guide you in the direction of a good DST sponsor. I actually work at a real estate investment advisory firm that specializes in helping clients exchange into DSTs so I'm happy to chat.

About biting the bullet and just paying taxes - Have you compared what your return would be in a syndication while paying taxes to a DST without paying taxes/ how long it would take to recoup the taxes you paid?

Quote from @Chase Puckett:

Quote from @Dylan Speer:

Have you considered selling and investing in a syndication or a gas and mineral rights royalty fund? 

 what sort of mineral rights funds are you referring to?

 Well I work at a real estate investment advisory firm that specializes in helping clients invest in DSTs and Reg-D's. Mineral rights funds fall under Reg D's. Shoot me a message, I'm happy to discuss how mineral rights funds work/what they are/who syndicates them. 

Hey Casey,

Given that you have a big family and a full time job, have you considered investing in a more passive investment such as an oil and gas mineral rights royalty fund?

These sound like great options. I'd just make sure your county does not currently, or plan on, imposing regulations on short term rentals. I'm hearing more and more about certain areas banning STRs with little notice.

Another option that may interest you is investing cash into a cash-flow oriented Reg-D fund, such as an oil and gas mineral rights fund. This would be a more hands-off option that would be less capital intensive and could potentially provide a higher level of certainty and reliability to your income. Happy to chat. 

Hey Ude,

What makes you want to do this in a foreign fund as opposed to a fund located in the same nation as you? Are you in the U.S.?

You will likely receive a step-up in basis and will not have to pay any capital gains tax. 

That being said, going down the route of a 1031 may not be necessary.

Have you considered taking that cash and moving it into a private placement or a gas and mineral rights royalty fund?

Minimizing Taxes when Building and Selling Houses:

Utilize cost segregation studies: These studies can help allocate the costs of construction into different asset categories, such as land improvements and building components, allowing for accelerated depreciation and potential tax savings.

Take advantage of available tax credits: Research and identify any applicable tax credits for construction, such as energy-efficient building credits or historic preservation credits, which can help offset taxes.

Consider installment sales: Instead of receiving the full payment for the property upfront, you can structure the sale as an installment agreement, spreading the tax liability over the term of the agreement.

Utilizing a 1031 Exchange for Commercial Property: To utilize a 1031 exchange for a commercial property constructed on a pad site, you can identify and acquire a like-kind replacement property within the specified timeframe to defer taxes.

It's important to meet the strict requirements of a 1031 exchange, such as properly identifying replacement properties and completing the exchange within the specified timelines.

Creating a contract for sale after renting the property for a year may not satisfy the "held for investment" requirement of a 1031 exchange, so it's advisable to consult with a tax professional or qualified intermediary to ensure compliance.

Converting Raw Land into Individual Lots:

There is no specific requirement to hold lots for a minimum of one year in order to qualify for a 1031 exchange. However, the intention to hold the land for investment purposes is important for a successful exchange.

Builders and 1031 Exchanges for Constructed Houses:
Builders can potentially use a 1031 exchange to defer taxes on houses they construct and sell immediately by identifying and acquiring like-kind replacement properties within the exchange timeframe.

I work at a firm that specializes in advising through cases like this so feel free to reach out. Am happy to chat. 

Have you considered exchanging into a DST?

Have you considered exchanging into a DST?