Zero Cash Flow Investments What is a “Zero Cash Flow Investment”? Sometimes referred to as “Zero-Coupon” or just “Zero’s,” these properties are just what they sound like - properties that that provide no cash flow to the owner or owners. These are highly leveraged assets, with loan-to-value (LTV) ratios of 80+%. All Net Operating Income (NOI) cash-flows are directed to debt service with the intention of quickly paying down principal and interest ..read more

You don’t need to be reminded of the pain that inflation can inflict on your spending power and investment portfolio performance. For over two years now, we have lived through some of the highest inflation in US history, and while the Fed remains steadfast in its mission to tame inflation, it does not appear that this erosive demon is going away anytime soon ..read more

The 1031 like-kind exchange can seem intimidating for real estate investors and owners. There are often multiple moving parts to coordinate, multiple parties to manage, and many thousands of dollars in tax liability at stake. You can understand why exchangers might want to have a Plan B or Plan C to help them sleep better at night while their 45-day or 180-day clock is ticking ..read more

A 1031 exchange is a powerful tool that can allow real estate investors to defer capital gains taxes and depreciation recapture when selling appreciated property. Depending on the circumstances, it may be possible to combine a 1031 exchange with a Section 121 exclusion to achieve an even greater tax advantage. Here’s a closer look at each of these tax codes and how they can work together ..read more

The pandemic and the emergence of a late-cycle commercial real estate market have been challenging for many real estate sectors over the past few years. While certain sectors like multifamily housing and industrial facilities continue to perform well, others, including commercial office space, retail strip centers and shuttered shopping malls, have not necessarily fared as well ..read more

Savvy property investors have been using 1031 exchanges to defer capital gains taxes for over a century. Despite its long history, there are still several common myths surrounding 1031 exchanges. While some of these myths may deter investors from reaping the potential benefits of engaging in a 1031 exchange, others can cause an exchange to fail, leading to potentially significant financial losses. Here is a look at five common misconceptions and the facts you need to know ..read more

If you are familiar with the 1031 exchange, you are probably aware that Section 1031 of the Internal Revenue Code allows investors three options for selecting replacement properties with their exchange. Yet, we find that many exchangers aren’t sure which approach is best for them, or they don’t fully understand the requirements of each option ..read more

Silicon Valley Bank (SVB) shares dropped from $267, on 3/08/23, to $100 the next day. The reason, the bank announced a capital raise and the sale of a large number of securities at a loss. That sparked investors and depositors to flee. The bank’s parent company disclosed that the market value of its held-to-maturity (HTM) bonds was $15.9 billion less than their balance-sheet value as of the end of September 2022. That gap was slightly more than SVB's $15.8 billion of total equity at the time ..read more

For investors planning to sell a rental property, a 1031 exchange offers the opportunity to defer capital gains taxes and depreciation recapture by reinvesting the funds into one or more new replacement properties. However, to complete this transaction successfully, it’s critical to carefully follow all of the rules and deadlines set forth by the Internal Revenue Service (IRS) and explained in section 1031 of the Internal Revenue Code.  ..read more

The Biden Administration recently released its 2024 federal budget proposal, and once again, limits to 1031 “like-kind” exchanges are on the table. This tax provision allows taxpayers to defer capital gains taxes and depreciation recapture on the sale of business or investment properties by purchasing a like-kind replacement property, provided that the taxpayer follows a specific process and meets required deadlines ..read more