If you're considering selling one of your real estate investments and buying another, it's something to definitely consider to keep as much of your profit in your pocket.
To save on paying any capital gains on the sale, make sure to get to know the 1031.
So named for Section 1031 of the U.S. Internal Revenue Code, a 1031 Exchange allows you to avoid paying capital gains taxes when you sell an investment property as long as you reinvest the proceeds from the sale within certain time limits in a property or properties of "like-kind" and of equal or greater value.
1031 Exchanges can get a little tricky because you have to follow specific timelines for identifying your replacement property and finalizing the sale, but they are do-able.
We completed one a few years back by selling a 4plex we owned and using those proceeds towards purchasing our office building. 1031s can be great for "buying up" and increasing your investment portfolio.
You'll need to use a Qualified Intermediary (QI) to help you complete the transaction correctly.
If you want to explore the possibility of doing your own 1031 Exchange, we're happy to have a conversation with you to see if it makes sense. 💡