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

If 1031 exchanges aren’t already on your radar as a real estate investor, Jonathan’s guest, Dave Foster, lays out the nitty-gritty details of why they should be.

On this episode of Zen and the Art of Real Estate Investing, Jonathan sits down with Dave to discuss this important aspect of real estate investing: 1031 exchanges and why you could be leaving dollars on the table if you aren’t taking advantage of them. Dave is a degreed accountant, 1031 exchange expert, serial real estate investor, and a qualified intermediary. He is also the author of Lifetime Tax-Free Wealth: The Real Estate Investor’s Guide to The 1031 Exchange.

Jonathan and Dave delve into how a dream of a sailboat led to him becoming a 1031 exchange expert. Dave shares what he learned from his first property investment, the ins and outs of the 1031 exchange process, and how to use it with the 121 tax-free exclusion. Dave also shares why he advises investors to buy properties you could enjoy even though they may not be as lucrative, why attachment to real estate prevents you from profiting as well as you could, what a qualified intermediary is, and the two types of people 1031 exchanges benefit most.

Dave Foster’s expertise in 1031 exchanges is evident during his chat with Jonathan, and if you’re tired of leaving dollars behind, this episode of Zen and the Art of Real Estate Investing is for you.

In this episode, you will hear:

Dave Foster’s winding journey to 1031 exchanges that began with the idea of a sailboat and time freedom
His first income property in Denver and what he learned about real estate from that experience
How a 1031 exchange works and why it offers more returns to you
The two ways to take cash out of your investments while you’re participating in 1031 exchanges
Using the 1031 exchange in conjunction with the 121 tax-free exclusion
Why Dave and his family moved to Connecticut and then Florida, where they purchased a fleet of vacation rentals to fund living on their sailboat
Their personal use of vacation rentals because they purchased premium properties on the water
The reason today’s short-term investors are hostage to management companies and renters
Dave’s encouragement to buy properties you enjoy even though they may not be as lucrative
Attachment to properties and how it holds you back from gaining more profits
A qualified intermediary’s role in the 1031 exchange process
What makes turnkey companies a great option for completing a 1031 exchange
When to get your qualified intermediary involved
The benefits to your heirs
The two types of people 1031 exchanges benefit the most
The one thing you need to know about 1031 exchanges that you might not have heard before

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