The 1031 exchange is a strategy that helps investors build more passive income, with fewer properties, all while avoiding the tax man. While many real estate investors know about this strategy, only a few of them know it well enough to pull it off. The rules are simple; sell a property, buy another property with the proceeds, and pay no capital gains tax. But, this is far easier said than done, and it’s much easier to make mistakes than most people think. Even our real estate hero, David Greene, had a 1031 exchange go awry.
To clear up the misconceptions, highlight the common mistakes, and guide us to tax-advantaged freedom, we’ve brought on 1031 exchange expert, Ryan Finch, to the show to share everything he knows about this misunderstood, often misused strategy. Ryan is a real estate investor at heart, house hacking as a sophomore in college to live for free. After working at multiple commercial real estate and development companies, he got the itch to start investing heavier himself and help others propel their wealth.
Now, Ryan works to help real estate investors and everyday homeowners make the most out of their equity. Ryan has unlocked the tools that have allowed those with home equity to build passive income streams, buy bigger, better properties, and reduce much of their landlord burden, all in a single transaction. If you’ve been sitting on some post-2020 equity, this episode will teach you how to use it as fuel for your financial freedom fire, all while ditching the tax bill that comes with selling!
In This Episode We Cover:
The 1031 exchange explained and using it to avoid taxes (legally)
Converting home equity into cash flow and when selling makes more sense than refinancing
How both the government and real estate investors benefit from the 1031 exchange
What to know before you use a 1031 exchange and the three rules you MUST pay attention to
1031 tax benefits, depreciation, and cost segregation to massively lower your tax bill
The most common mistakes investors make when doing their first 1031 exchange
And So Much More!
Links from the Show
Find an Investor-Friendly Real Estate Agent
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BiggerPockets Pro Membership
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BiggerPockets Podcast
BiggerPockets Merch
Listen to All Your Favorite BiggerPockets Podcasts in One Place
Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts
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Find a BiggerPockets Real Estate Meetup in Your Area
David's BiggerPockets Profile
David's Instagram
David’s YouTube Channel
1031 Exchange—A Definitive Guide for Real Estate Investors
Will a 1031 Exchange Help Grow Your Portfolio?
How to (Legally!) Avoid Capital Gains Taxes on Real Estate
Rich Dad’s CPA on How ANY Investor Can Avoid Taxes
IPX
Asset Preservation Inc
First American
Connect with Ryan:
Ryan's Website
Phone Number: 720-439-6540
Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-707
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