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What would you do with 100k that you were about to 1031 Exchange? (Whats the fastlane way)

Discussion in 'Real Estate Investing' started by 21elnegocio, Nov 1, 2018.

  1. 21elnegocio
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    21elnegocio Bronze Contributor FASTLANE INSIDER

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    Hello Guys,

    If you were about to 1031 exchange a couple of properties and they are about to profit you 100k, what would you 1031 exchange that money into? In other words what strategy would you use to turn that 100k into more profit faster ?


    -Would you buy 1 single family home ?

    -1 townhouse or condo ?

    -3 townhouses ($32,333 down into each townhouse) ?

    -1 Triplex ?



    Please explain your answer, the goal is to create 100k into 500k the fastest way possible.
     
    Kingmaker, Kak and SteveO like this.
  2. BrandonS85
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    BrandonS85 Bronze Contributor Speedway Pass

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    Underperforming rentals that can be developed for higher income. Make more money, 1031 again.
     
    21elnegocio likes this.
  3. SteveO
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    SteveO Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Do you currently have debt on the properties that are selling?

    I just sold a small commercial strip mall. No exchange this time. It feels like taking the tax hit and waiting for a less heated market is in order. Much easier to buy distressed properties when there are less buyers.
     
    100k, Mikkel, Red and 6 others like this.
  4. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I was going to say exactly what @SteveO said above...

    Take the tax hit and wait for a better opportunity.

    Just my $.02...
     
  5. garyfritz
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    garyfritz Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Summit Attendee

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    I sold a property about 2 years ago and took the tax hit, intending to use the funds to do some flip projects with a realtor friend. After the sale when it was too late to do a 1031, she was looking for properties and informed me the market was just not cooperating for flip opportunities. But I didn't know where else to put the $$ so I bought another single-family house. Might not have been optimal, but it's worked out well -- I get about 7.2%/yr rent (gross), and Zillow sez it's gone up 20% in 2 years. My renter has said she'd like to buy it, so I could get out pretty easily, but then what do I do with the cash? I think I'll probably hang onto it, hoping that northern CO real estate will continue to be a pretty solid bet even if the market softens. I may regret that decision if the local market tanks, but it's never done that before, so...
     
  6. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    $100k gain is only a $20k tax hit. Not enough to move me into something just to save the money. I think it would be wrong to bank on appreciation right now in AZ.
     
  7. 21elnegocio
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    21elnegocio Bronze Contributor FASTLANE INSIDER

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    Thank you for your guys feedback.
     

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