Can I Change From Joint Tenants To Tenants-In-Common?
There is no formal process that transitions from joint tenants to tenants-in-common. Instead, the joint tenants must be terminated and new tenants in common created. How simple the transition is depends on how you go about it. In this article, we’ll look at two methods for making the transition.
Managing Risk Exposure On Existing Investments
As a real estate investor, you’re very keen on working out cash flows and appreciation of a property. But what about the various risks inherent in all properties? Are you managing your exposure to different risks? Are you aware of the specific risks that come with each property?
The Limitations of Delaware Statutory Trusts in 1031 Exchanges
The Delaware Statutory Trust (DST) is a popular investment option for a 1031 exchange. For many investors, DST Replacement Property Interests offer the opportunity to exchange into properties that would otherwise be beyond their reach—and enjoy a predictable income stream without any landlord obligations. The appeal of DST 1031 investments is that they allow multiple investors to purchase ownership interests in institutional-quality properties like apartment complexes, office towers, and retail centers. However, investors considering a DST investment should be aware of certain limitations.
Realized vs. Recognized Gains in Real Estate
Every real estate investor or property owner should be familiar with a couple of key concepts: “Realized Gain” and “Recognized Gain.” Although they sound similar, they are vastly different—and knowing the difference can dramatically impact your bottom line.
A Tale Of Two Cap Rates
Cap rates are loaded ratios. Despite being one of the most commonly used metrics to evaluate and compare real estate investment opportunities, cap rates have their flaws and limitations. You have to unpack them to understand the value they are trying to represent. To gain a deeper understanding of cap rates, we’ll start by describing what they are and then move into comparisons.
Maximizing After-Tax Cash Flow Through Financial Tools Online
Investors are conditioned to look at pre-tax returns. It’s a learned behavior that can be traced back to the day that first paycheck arrived. But alas… somewhere between gross and net, the wages were placed in a tax grinder. Years and decades later, many investors still struggle to remember that the IRS has a voracious appetite. The key is not to focus so much on the top dollar amount; what matters at the end of the day is how much you can put in your pocket after taxes.
Tax Basis in Real Estate Part 1 - What is Basis?
One of the first questions, and frankly one of the most important, I typically ask real estate owners who are considering or are in the midst of a 1031 exchange is “what is your adjusted basis in the property being sold?” I dare say that 95 percent of the real estate owners I speak with on a daily basis don’t know the answer to this question.
The End of Non-Real Estate 1031 Exchanges?
Our previous blogs on 1031 Exchanges focus mostly on real property, or real estate. However, the Internal Revenue Code (IRC) 1031 also covers what is dubbed “personal property.” In other words, property held for investment and/or business purposes, but that isn’t real estate, is also eligible for 1031 exchanges - at least for the current time.
Comparing DSTs And UPREITs
How do Delaware Statutory Trusts (DSTs) and Umbrella Partnership Real Estate Investment Trusts (UPREITs) differ, and when might you want to use one over the other? In this article, we start by looking at a few similarities between these two structures and then dive into their differences.
Cash Flow: More Than Just Money
The term “cash flow” brings up images of, well, a flow of cash. And, the basic meaning isn’t too far off the mark. Overall, cash flow is defined as the amount of profit (mainly consisting of rental income) from an investment property, minus debt service payments (i.e., mortgage payments), capital expenditures for upgrades, property expenses, and vacancy/credit loss.
