Blog

New Federal Guidelines Give Opportunity Zones More Time

Due to the COVID-19 pandemic, the government has given investors and developers an extension for deploying capital and starting projects in Opportunity Zones (OZ).

Before the deadline extension, investors were required to deploy 90 percent of their capital into OZ projects. To ensure these deployments were met, the government checked where OZ-related funds were going twice each year. With recent modifications to the rules by the Treasury Department and Internal Revenue Service, the new extension allows investors to hold onto those funds until June 30, 2021.

Disadvantages of Delaware Statutory Trust (DST) 1031 Exchange Replacement Properties

Delaware Statutory Trusts (DSTs) offer the opportunity to invest in commercial real estate passively. Such passivity means handing control over to someone else. Investing in a DST means you’ll be a hands-off investor, basically along for the ride. It’s the sponsor who will be making all decisions on your behalf. In most cases, you’ll have little to no input on those decisions. For some investors, that’s just fine as they don’t want the headaches that can come with more direct real estate investments. 

Key Steps for Meeting The July 15th Filing Deadline

Even though our world may feel like it is at a standstill, many property owners are still navigating the time-constrained process of a 1031 exchange. However, in response to the chaos of the pandemic, the IRS issued Notice 2020-23, which extended deadlines for time sensitive tax actions.  

From V To Swoosh: CRE’s Projected Recovery

A CBRE April commercial real estate report threw a wet towel on any V-shaped recovery expectations. In the report, CBRE doesn’t expect CRE growth to return until 2021 and staggered sector growth coming some 12 to 30 months later, with hospitality taking the longest to recover.

Financing Options Remain Available But With More Requirements

As expected, lenders have tightened up loan requirements, but unlike 2008/2009 (GFC — Great Financial Crisis), the market hasn’t frozen up. During the GFC, liquidity dried up. Since the beginning of this year, the FED has been pumping billions of dollars into the credit market to avoid a replay of 2008/2009. Some of this liquidity has come by way of a program called the Primary Dealer Credit Facility, which was used during the GFC and again as the stock market cratered in February/March.

Are April & May Rents Setting Unrealistic Expectations?

April and May’s rents are down compared to the previous year but not by a wide margin. However, with uncertainty about the economy due to the pandemic, it’s unclear what to expect in the coming months. Unemployment benefits can’t sustain out-of-work residents indefinitely. The path forward isn’t entirely clear at this point.

I Need A Backup Strategy For My 1031 Exchange

You have a property picked for a 1031 exchange, but want to create a backup plan in case it falls through. In this article, we’ll walk through a few simple options that can be added to your 1031 forms and used as a backup. 

Mortgage Forbearance And Eviction Moratoriums

With the shutting down of the economy due to COVID-19, many tenants are without a job, which means they also can’t pay their rent. For landlords, this means a significant cut in property cash flow. However, because cash flows have been reduced doesn’t mean expenses have also been reduced. With active tenants on the property, expenses are likely to remain at previous levels. How do landlords survive in this type of situation?

What is a Partial 1031 Exchange?

Often, 1031 investors would like to set aside a portion of the money from their property sale. Perhaps they have college tuition or an upcoming wedding to consider. This begs the question: Is it possible to keep a portion of a property sale’s proceeds while still deferring the majority of taxes with a 1031 exchange?

Diversification Considerations When It Comes To DSTs

Investment diversification combines different financial products into a single portfolio. This, in turn, spreads the potential negative impact of specific risk across the portfolio. In plain English, this means that owning several assets, that are impacted differently by certain economic forces, ensures that a portfolio is not overly exposed to one type of risk.