Losing Money in a 1031 TIC?
Recently, I’ve had several conversations with real estate investors who own Tenants-In-Common (TIC) replacement properties that are going to be sold in the near future. In each case, sometime during the past decade they used part of their 1031 exchange funds to purchase TIC properties that are now being sold because mortgage is coming due. Unfortunately, several of these investors will receive substantially less in sale proceeds than they originally invested due to poor property performance. Needless to say, these folks aren’t real happy.
Tax Reform May Eliminate 1031 Exchanges & Mortgage Interest Deduction
Part 1 in the Realized Series "2017 Tax Reform Impact on Real Estate"
Benefits of Real Estate Investing
According to a Morgan Stanley Wealth Management Investor Pulse (December 2013) survey of 300 millionaires, 77 percent indicated they owned real estate as an alternative investment – more than double the next closest choice of alternative investments.¹ With so many investment options these days, real estate remains the investment of choice for several reasons:
Fractional 1031 Investment Benefits
Real estate investors contemplating a 1031 exchange must make many decisions regarding their choice of replacement property. Investors must determine the type of property, location of the asset, and whether or not to reinvest into multiple assets. Investors then have to thoroughly evaluate their options and select just a few potential choices -- all within 45 days from selling their investment property!
Six Benefits Of Single-Tenant Net-Leased (STNL) Properties Investments
A single-tenant net lease property is one which, as the name implies, is fully leased to one tenant on a net lease basis. The lease is often a triple net lease , meaning the tenant is fully responsible for all property operating expenses. A single-tenant net lease (STNL) offers investors the opportunity to own a (typically) freestanding property occupied by a single tenant. New leases for these properties are often longer-term (10 to 25 years) and tenants frequently include household-name businesses such as Walgreens, McDonald’s or Starbucks. In addition, net lease properties may provide the following investment benefits:
Real Estate Risk Profiles
The relationship of risk and return is a core concept to any investment decision. Nearly every investment (apart from keeping money under your mattress) is designed to produce an expected return - typically through income, capital appreciation , or some combination.
Four Ways Real Estate May Build Wealth
You’ve probably seen the late-night infomercials, reality TV shows and get-rich-quick books on real estate investing. Most focus on buying properties for peanuts, making a few minor cosmetic upgrades and flipping the property for big bucks. Unfortunately, for the average investor, it seldom works this way.
What Is A Net Lease?
If you’ve ever considered investing in commercial real estate, you’ve likely heard the term “net lease” or “triple-net” mentioned. Unfortunately, these terms can have different interpretations depending on the context and market. They are also amongst the most commonly misused terms in real estate, which can be quite confusing for potential investors.
Pros And Cons Of Various Property Types
Although most commercial real estate properties have the ability to produce income, the strengths and risks in their potential cash flows differ by type of property. Traditional commercial property types are generally considered to consist of multifamily, retail, office and industrial, however, several other property types are becoming more accepted by investors. Let’s take a quick look at different investment property types along with their relative pros and cons. It should be noted that this post is a generalization and that all properties are subject to asset-specific traits.
Pros and Cons of a 1031 Exchange
A 1031 exchange is a tax-deferred exchange of one investment property for another. The IRS permits investors to sell an investment property and defer capital gains, provided they reinvest the proceeds into a replacement property. If you are currently investing in real estate, this probably seems intriguing. In determining if a 1031 exchange is right for you, consider the following pros and cons:
