At Pacific Partners Real Estate Investment we have provided many multi-family owners, who are interested in selling their properties, guidance in simplifying their investments and increasing cash-flow, while deferring their substantial capital gain liability. We have successfully helped clients exchange into higher grossing apartment buildings and Credit Tenant NNN properties in order to satisfy their 1031 Exchanges. Credit tenant assets with fixed-rate, long term debt and an investment grade tenant in place is more like buying a bond equivalent than a more speculative real estate investment. Many of our clients report that they have never slept better in their lives.
Net leased investments are a risk-averse alternative for investors that are transitioning from management-intensive investments, to a relative ‘coupon clipping’ investment with no management operations like their other real estate assets.
Refers to section 1031 of the Internal Revenue Code whereby the tax on the effective gain resulting from the sale of an investment property can be postponed if you reinvest the proceeds in a like-kind exchange. According to the IRS website, “Whenever you sell a business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in a similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free. The exchange can include like-kind property exclusively, or it can include like-kind property along with cash, liabilities and property that are not like-kind. However, if you receive cash, relief from debt, or property that is not like-kind you may trigger some taxable gain in the year of the exchange. There can be both deferred and recognized gain in the same transaction when a taxpayer exchanges for like-kind property of lesser value.” You can read more at: IRC Section 1031.