Contemplating Selling Your Local Income Property?

But Don't Know What to Do with the Proceeds?

By
Don Meredith
Concorde Exchange Group

If you are like many Southern Califor­nians who own investment property, you may be facing a common dilemma. You'd like to cash in and make the most of your income property but you're not familiar with the alternatives available. Be­fore you sell, it is critical to be aware of the obstacles and traps ahead so you can es­cape paying higher taxes while maximiz­ing the returns on your real estate assets.

It is known that the rental market in Southern California has failed to keep up with the rapid appreciation of property values resulting in returns of one to three percent on equity and extremely low CAP rates upon sale. Today's real estate and fi­nancial experts have extensively re­searched the current Southern California market and want to let you know there is good news. Don Meredith of Concorde Exchange Group-Professional Asset Management states, "If you are looking to take advantage of the market at its peak while avoiding a large tax consequence, then a 1031 Exchange from apartments to commercial may be the perfect solution."

Meredith points out that there are four options, but the 1031 Exchange will offer the best return on your investment. Op­tion 1: Pay the tax. Option 2: Transfer as­sets to a CRT (charitable remainder trust). Option 3: Exchange into an individ­ually owned apartment or commercial property. Option 4: Exchange into an in­stitutional class Tenant in Common (TIC) offer, backed with AAA rated tenants and institutional level property management.

Don Meredith explains, "In 2002 the IRS opened the door to a world of possi­bilities for owners looking to sell their appreciated property allowing for a 1031 Ex­change by way of a TIC situation." A pop­ular candidate for the TIC alternative is an income property owner seeking a change from active to passive real estate ownership, as well as looking to relieve themselves of tenants, headaches and management. A TIC allows you to go from owning 100 percent of your property to owning a certain percent of a much larger piece of real estate depending on the investment amount. This enables mult­iple owners to purchase larger and higher-quality properties with investment grade tenants, in turn, potentially greatly increasing their monthly income while putting trapped equity to work.

Meredith represents over 60 TIC Real Estate Companies. Generally TIC's are marketed as securities not real estate. Darryl Stein­hause, Esq. Partner from Luce Foward Hamilton & Scripp quotes "The SEC defines TIC's as securities as does the State of California”. Meredith goes on to say, "In my opinion, the securities TIC's are the only way to go from a regulatory front and from the investors point of interest. There is complete transparency and more importantly often a 3rd party due dili­gence consultant and independent re­viewer.

William L. Exeter, president and chief executive officer, Exeter 1031 Ex­change Services, LLC comments that "TIC’s help investors diversify their real es­tate investment portfolios where they oth­erwise could not. Investors are often concerned about the 45 day identification deadline. The TIC investment can significantly reduce the risk and stress involved with the 45 day period because the Investor can not only identify but in most cases actually close on the TIC investment during the 45 day period."

You can ask Mr. 1031 any questions you may have about 1031 exchanges, replacement property options by e-mailing him at meredth1@san.rr.com call him at 1-800-479-9299 or visit their website at http://www.donmeredith1031.com/ Ask about 1031 Workshop dates

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