The old switcheroo

Swapping for a higher priced property

Image courtesy of Stuart Miles at

Since today is the day after US income taxes are due, now is a good time to remember it is never too early to plan your tax strategy.  If you are investing in real estate you need a good CPA and to be familiar with section 1031 of the IRS code.

We are not tax professionals, so always consult your trusted CPA to provide the nitty gritty of the rules, but this opportunity applies to like kind exchanges of property.  Section 1031 allows you to postpone paying tax on the gain if you sell a property and reinvest the proceeds in a similar, higher priced property.  Remember, it is not tax free but tax deferred.

There are time limits on taking advantage of a 1031 exchange.  First, you must identify potential replacement properties within 45 days from the date you sell the relinquished property.  Second, the replacement property must be received and exchanged within a specified amount of time.

This is a great opportunity for a real estate investor to keep rolling proceeds forward into more expensive properties without immediate tax consequences.  Your net worth will soar!

Have you taken advantage of a 1031 exchange?  If so, please comment your experiences here!


Lots of money can be made when you buy

Image courtesy of phanlop88 from

Image courtesy of phanlop88 from

It sounds like an oxymoron, but you can make money when you buy real estate.  In your search for a killer deal find a realtor who has experience working with investors.  It can be difficult for a lot of realtors to work with the unemotional investor if they are used to the typical anxious seller or the buyer who falls in love with every house they see.

One of the best realtors to know is the real estate owned (REO) realtors in your target area.  These are the realtors that manage the bank owned properties.  Find them as can make a big difference in your bottom line from the moment you say “BUY”!

Anyone experience making money when you buy?  Please comment.