How to make more money by executing a 1031 Exchange
When it comes to real estate investing, saving money can really boast one’s morale. Many real estate agents go about by helping their clients save as much money as possible, but if you happen to know a thing or two more than them, you have a better chance of being their “go to” guy. As a real estate agent who deals with investor clients you need to be well aware of the 1031 exchange. This exchange helps your clients save a great deal of money, as a result you the best real estate agent for them. Becoming their favorite can get you more commission flowing in.
The 1031 exchange explained:
If you are new to this concept, let us help you with the basics of the entire deal. The 1031 exchange means that the real estate investor can reinvest the full profit of his previous investment into a new investment without having to pay state and federal capital gains. This is also known as deferring the gains. This applies to everyone. You can also share this with the clients you worked with in the past. The good news for you is that anybody who owns investment real estate is a potential candidate for executing a 1031 exchange, including your past clients.
Reinvest more money by using 1031 exchange:
If you think as an investor, wouldn’t it be better if you had more money to invest? Yes off course! If the property is fully depreciated and no longer provides a big tax deduction, 1031s are often the way to go.
What if your client’s previous investment was not as good as they expected? Using the 1031 exchange you get all their money to be reinvested in a new property and make amends, it not only gives you more money but also gives you another shot at investing. Similarly, the 1031 can help your client increase their overall cash flow.
Managerially liable properties
Where you see an investor complaining about the pains of being a landlord, it’s your time to step in with a 1031 exchange. This offer will help them unload any unwanted or difficult to manage properties. There are certain properties that require everything to be done by the landowner. You can get your investor to sell these and buy easily manageable apartment buildings, so that they can hire a manager and enjoy their time as landlords.
Portfolio
With the help of a swiftly executing a 1031 exchange, you can help your investors buy different kinds of properties. You can help them sell the unwanted ones and move to the new horizons.
On the other hand, executing a 1031 exchange is also ideal for investors who want to streamline or consolidate their real estate portfolio. They can sell off their smaller properties, pool that equity, and use it for a larger acquisition.