Defer, Leverage, and Expand Through 1031 Exchange with Dave Foster

As a real estate investor, 1031 exchanges should be on your radar. If they aren’t, Jonathan’s guest, Dave Foster, lays out why they should be. On this episode of Zen and the Art of Real Estate Investing, Jonathan’s chat with Dave focuses on this crucial aspect of real estate investing: 1031 exchanges and why ignoring them could be leaving dollars on the table.

Dave, a degreed accountant, 1031 exchange expert, serial real estate investor, and a qualified intermediary, shares his insights gained from years of experience and emphasizes the wealth-building strategy outlined in his book Lifetime Tax-Free Wealth: The Real Estate Investor’s Guide to The 1031 Exchange.

Dave Foster has insights every real estate investor should know. Jonathan and Dave explore the story of how a sailboat dream shaped his expertise. He shares lessons from his first property investment, demystifies the 1031 exchange process, and highlights its synergy with the 121 tax-free exclusion. Dave also explains why he recommends enjoying properties, even if they're less lucrative, and stresses the downside of becoming too attached to real estate. Unveiling the role of a qualified intermediary, he identifies the two types of individuals who benefit the most from 1031 exchanges.

 

Some important points surrounding 1031 exchanges Dave believes you should know:

  • There are several ways to pull cash out of your investment properties even as you reinvest into new ones using the 1031 exchange method.

  • Completing a 1031 exchange means having a qualified intermediary (QI) to document the exchange.

  • Your QI should get involved in the selling process before you’re ready to sell.

  • Buying properties you enjoy can significantly increase your personal return and enjoyment.

 

Bottom line: Don’t leave your hard-earned dollars on the table when you can make big gains with tax-free income.

If you want to learn more about Zen and the Art of Real Estate Investing Podcast, check out http://www.trustgreene.com/podcast/zen/101.

Real Estate InvestingJonathan GreeneComment