• Home
  • /1031 Exchanges: An Advanced Real Estate Strategy

1031 Exchanges: An Advanced Real Estate Strategy

MNM Partners has extensive experience with the entire 1031 Exchange process, and we work exclusively with Licensed Real Estate Brokers/Agents to meet their clients’ specific strategies, priorities, and timing needs.

Maximizing Return

Sophisticated real estate owners know that leverage can maximize wealth. A 20% down payment can result in a 50% investment return with the right amount of debt and financial leverage. Tax deferment is also a type of leverage. Just as you use debt financing to leverage a purchase, you can use tax savings to acquire even greater wealth. With the successful use of tax-deferred 1031 Exchanges, a savings of 20% to 40% of capital gains tax and depreciation recapture on the sale of their prior property can now be retained to acquire larger properties. A buyer can accelerate his investment horizon by many years by carefully developing an strategy utilizing these exchanges.

Leveraging the 1031 Exchange

The vast majority of commercial real estate buyers don’t make use of the wealth-building advantages of the tax-deferred 1031 Exchange. Once an property sale goal is realized, many owners sell the property, pay taxes, and then purchase other real estate, without using a 1031 Exchange

1031 Exchanges are useful in a wide variety of circumstances. They provide excellent opportunities for resourceful buyers to create transactions which would not be possible through a sale-purchase format.

Growing Equity Without Capital Gains

The overriding advantage of a 1031 Exchange lies in the ability to move equity from property to property without having to pay the capital gains taxes. Exchangers can create an entire purchase program using the wide variety of benefits available, and a buyer can move successively from one 1031 Exchange to another any number of times.

You don’t need to wait until a property is under contract to get the process started.