Ritter on Real Estate The Good, The Bad, and The Ugly of 1031 exchanges (Part 2)
In part two of our discussion on 1031 exchanges, we pick up where we left off with Michael Brady and Alex Shandrovsky. As more and more syndicators are advertising them, it’s crucial to get educated and understand the intricate rules. One of the strict constraints is the two different timelines, namely the 45-day replacement property identification period and the 180-day closing period. We learn more about these parameters, along with the consequences if they are not adhered to. Michael also sheds some light on the COVID-related changes in the space. From there, we move onto the Delaware Statutory Trust, which can be used in conjunction with a 1031 or instead of one to defer capital gains. We get an overview of how this structure works and when it makes sense to utilize it. Finally, we round the show off with our keys to success, where Michael shares why he’s most proud of his kids, and Alex shares the role Michael has played in his success. Kent even talks about how meditation has helped him stay more present and focused in daily life. This was a great conversation, and Michael and Alex do a great job of unpacking this complex but effective wealth-building tool. Don't miss out on today’s show!
Key Points From This Episode:
- Learn more about the two strict time constraints that come with 1031s.
- Why it’s recommended to only identify three replacement properties.
- The constraints that come with identifying more than three replacement properties.
- Some 1031 timeline changes that have happened in light of COVID-19.
- Why it’s preferable to have a contract and even do due diligence in the 45-day period.
- How the identification period works if you’re looking at syndication.
- A look at a Delaware Statutory Trust, an alternative to defer capital gains tax.
- The main takeaways from all this dense 1031 information.
- The final keys to success with Michael and Alex: One sponsor question, what they’re most proud of, and more!
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