Real Estate Investments

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Why a Buyer Should Never Pay More than Appraised Value on Leveraged Property

Recently a friend asked me to explain why a buyer should never pay more than appraised value on leveraged property.  Since she had taken a few classes I began by explaining the opportunity costs associated with this strategy and I could see her eyes "glass-over" and I knew I had lost her. When I shifted gears and started showing her the economic costs in dollars and cents, she began to understand.  Here are my examples. Example 1 Let's say you [...]

Tax-Deferred 1031 Exchanges

A 1031 exchange involves a swap of like-kind real estate for like-kind real estate. Tax-deferred 1031 Exchanges are important for investors of commercial and income properties. Federal tax law allows taxpayers to defer capital gains tax on the exchange of property used in trade or business or held for investment. A 1031 exchange postpones taxes, it does not eliminate them.  However when a property is transferred to an heir with the basis step-up that occurs, capital gains tax are forgiven at [...]

2016-07-26T07:51:26-07:00Categories: Real Estate Investments|Tags: |
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