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Turn Your Commercial Sale Listing
Into a
Commercial to Residential 1031 Exchange
Got a Commercial Listing?
Your Client should do a
Commercial to Residential 1031 Exchange
Here’s Why
Times Have Changed
Due to current events, residential and commercial agents nationwide are teaming up to take
advantage of one of the largest sell offs in commercial property history.
Just like internet streaming wiped out Blockbuster.
Online shopping is replacing malls.
Remote working is replacing the modern day office building as a cheaper, safer, more
productive way to conduct business.
Most Commercial Landlords stuck with these unoccupied assets with low demand and high
expenses are looking to sell.
What is the best way to sell these empty, unwanted commercial business locations?
TAX FREE using a 1031 Tax Deferred Exchange.
And where should these commercial property owners reinvest their profits after liquidating?
The high yielding residential arena, where the risk is less and the demand is much higher.
5 Reasons Your Client should do a
Commercial to Residential 1031 Exchange
Avoid Taxes Forever
A 1031 Exchange is a 100% LEGAL way for your client to avoid paying ANY income taxes when you sell their real estate investment property. All gains generated from the sale of their old property is rolled over to their new replacement property (s). There are an unlimited number of times they or their heirs can successfully rollover gain and postpone tax.
Below are the estimated taxes your client will avoid paying:
-
Federal Capital Gains Tax
-
3.8% Medicare Tax
-
State Capital Gains Tax
-
Depreciation Recapture Tax
Example: You sell a client’s $2,000,000 paid off asset
Without 1031 Exchange: your client will pay estimated $600,000 in taxes.
With 1031 Exchange: your client will pay $0 taxes (Estimated 30% savings)
Highly Liquid
When your client does a 1031, your client can pull cash out in 1 of 2 ways:
1) Your client can pay taxes (aka BOOT) & pull cash out directly from net sale proceeds of their old Relinquished Property
OR
2) Your client can pull tax free CASH OUT of their new Replacement Property(s) by mortgaging them after completion of 1031 Exchange, using a 60%-70% LTV Blanket Mortgage.
Higher Cap Rate
When your client does a 1031, your client can exchange a commercial property with a low yielding cap rate for multiple residential rentals with higher yielding cap rates.
Hands Free Retirement Fund
Doing a 1031 will help your client fund their retirement by collecting $10,000 to $25,000 or more per month in positive cash flow via exchanging their commercial property for a portfolio of professionally managed residential rentals.
Powerful Estate Planning Tool
When your client completes a 1031 Exchange ANY & ALL Capital gains taxes they owed on the sale of their investment property are eliminated upon their death and totally forgiven by the IRS. Their real estate investments will be bequeathed to their heirs with a step up in basis on the date of their death. In essence all their gain is wiped out and their heirs start fresh from where your client finished. Passing their real property assets on to their heirs with absolutely no tax bite is one of the most powerful estate planning tools in USA.