1031 Exchanges Lorton VA

This article discusses the benefits of 1031 exchanges and explains how they can be used to better leverage real estate in an investor's portfolio.

Local Companies

IBBS
301-316-0222
5121 henderson road
temple hills , MD
Developers Diversified Reality Corp
(703) 385-1158
12210 Fairfax Towne Ctr
Fairfax, VA
Boston Properties Inc
(703) 471-1157
12030 Sunset Hills Rd
Reston, VA
Boston Properties
(703) 668-0740
11951 Freedom Dr Ste 100
Reston, VA
Developers Diversified Realty
(276) 228-3111
215 Commonwealth Dr
Wytheville, VA
Boston Properties
(703) 668-0220
11955 Freedom Dr
Reston, VA
Boston Properties
(703) 471-3984
12011 Sunset Hills Rd
Reston, VA
Developers Diversified Realty
(276) 228-4641
330 Commonwealth Dr
Wytheville, VA
Boston Properties
(703) 464-4120
11951 Freedom Dr Ste 100
Reston, VA
Boston Properties
(703) 451-7204
7451 Boston Blvd
Springfield, VA

1031 Exchanges

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1031 exchanges remain one of the most powerful investment tools, yet they are also one of the most misunderstood and under-used. 1031s were created by the government to help investors increase their returns through continual investing. Investors need to understand how to leverage their portfolio using 1031 exchanges to best maximize future growth.
To put it in perspective, one can imagine 1031s as free capital with:

  • 0% interest: The investor pays no interest on the money the government gives them.
  • High LTV: The capital can be leveraged at the investor’s highest LTV capability. 
  • No Due Date: Investor keeps the money as long as it is invested in real estate. 
  • 85% Free Profits: The investor keeps 85% of what the government's (leveraged) money makes them—these are free profits from an outside money source.
  • Potential Non Re-Payment: With proper long-term investment practices and proper financial planning, the investor may be able to avoid fully paying back the government’s money (this may also include not having to pay back any depreciation recapture).

Tax free compounding growth through 1031 exchangesCommon misconceptions

The most common misconception with 1031 Exchanges is that they save you money. The thought process goes something like this: “If I do a 1031, I don’t have to pay the government their taxes this year; thus I saved a little bit of money.” However, there are two major problems with this line of thinking. First, 1031s by design only defer an investor’s tax obligation, thus the investor still owes the money and has not saved a penny. Second, this thought process requires the investor to look backwards at the property sold as a profit source—not forward at the properties to be purchased—and looking backwards inevitably decreases potential returns.

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NuWire Investor is an online publication that offers quality information about alternative investments such as real estate, commodities and franchises.

Author: Ken Zimmerman
Copyright © NuWire Investor and NuWire, Inc 2007. All rights reserved. NuWire Investor material may not be copied, reproduced, redistributed, published or modified without the prior express written consent of NuWire, Inc.

Featured Local Company

IBBS

301-316-0222
5121 henderson road
temple hills , MD

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