Welcome to the Real Estate Investing Mastery podcast. I’ve got a treat for you today.
We’re going to learn about 1031 exchanges from Greg Schowe, someone who’s been in the business for a long, long time.
But first – previous episodes and show notes can be accessed on my website, Real Estate Investing Mastery. You might want to surf the titles… something that you’ve been wanting to know might jump out at you.
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When Greg started selling real estate, he started in commercial property right away. For his first 2 years, he primarily sold apartment buildings.
He was advised by a mentor that a good way to truly master a subject is to teach it to others. That’s when Greg got immersed in 1031 exchanges, establishing himself as the go-to guy on the tax strategy.
He often gives seminars about 1031s that are attended by CPAs, attorneys and real estate brokers/investors/agents. He works for Asset Preservation, Inc. (API), a company that executes 1031s for clients, which is about 15% of his work. He is also a successful real estate investor.
DEFINITION: A 1031 exchange is an IRS-approved program that allows an owner of real property to defer up to 100% of capital gains on a property held that is used for productive trade, business or investment as long as seller invests the proceeds into a property that is used for productive trade, business or investment.
The definition is the simple part. How it’s done is more difficult. You will want assistance from your tax advisor and/or a company like API.
Within 45 days of sale’s close, the investor must identify the replacement property that the 1031 will apply to. Investor must close on purchase of replacement property in 180 days.
Real estate investors (buy & hold) can use 1031 exchanges. Dealers (wholesale deals, flips) cannot. A 1031 user must be able to demonstrate intent to hold property for investment.
Investors and agents can capitalize by helping 1031 users find properties quickly (within 45 days). If you, as an investor, deal with commercial property or land sales, you should be sure sellers know about 1031 exchanges.
Listen and learn…
- Set up 1031 exchange before closing on property sale
- A 1031 requires an assignable contract
- Do NOT mess with the IRS
- Done properly, a 1031 exchange is a valuable wealth building tool
Mentioned in this episode:
- Joe’s podcasts on iTunes: Real Estate Investing Mastery Podcast
- Podcast Hotline: 636.255.8815
- Joe’s Coaching Program: Joe McCall Coaching
- Get Greg’s 1031 checklist: use search function on APIexchange
- Use API’s Exchange Counselors: call 800.282.1031 and reference Greg
- Greg’s phone number: 314.369.8766
- Greg’s email: gregschowe1972@gmail
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