Real Estate Exchanging IRS code 1031

                           What is an 1031 exchange

An 1031 exchange is a real estate transaction involving two or more pieces of real estate wherein ownership of one property is given up for ownership in another property or properties, with little or no cash given or received, and deferring the capital gains  taxes to a later date. 

    What is an exchangor -

Real Estate Exchangors are the problem solvers of the real estate industry.

Professionals that make thing happen, not waiting for thing to happen.

Exchangers think in terms of completing transactions.  (Not in just making the sale).

To be an effective Exchangor, you must become more interested in the people involved in the transaction than the property.

There is no bad real estate, only ownership problems or wrong owners.

All that ever happens in any real estate transaction is, the buyer and the seller find a way to give the seller and buyer their equitable interest, so that both end with a Win-Win-Win situation.

How do exchangors get paid.

Most exchangers work on a fee basis, not a commission basis. 

Your client will be paying you, and the broker or brokers involved in the transaction will be paid by their client.

In exchangor language it is called (you keep your and I'll keep mine) or YKYIKM

Most likely you can expect to be paid in cash, but you can take your fee with anything of value. 

Cash, a note, boat, car, property, what ever you can work out. 

Exchangors know that receiving cash costs you money

The fee you charge is negotiable just like any listing you may take.

Example of a creative solution

          Sell with option to buy back instead of a loan

Present Condition – As an exchangor, you have been approached to provide a $25,000 loan. 

A parcel of land with an appraised value of $35,000 would secure the loan.

Even though you would have a mortgage and note, you do not want to put yourself in the position of lending someone that amount of money and have the possibility of going through the problems and expense of foreclosure to recoup your investment.

Possible Resolution - Instead of out right declining the situation, you offer to purchase the parcel of land for $25,000 with an option for the present owner to Buy Back the property in the future for $30,000

Benefits to You - You will have taken title to a parcel of land worth $30,000 that you paid $25,000

Benefits to Seller – The seller will receive the $25,000 he was looking for, will not have to make payments and for a premium will have the ability to repurchase the property any time in the future.

                                             This is a creative Win - Win transaction


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