Pushing Dirt

At the risk of blogging burn out, I’ve developed a new web site - http://www.likekind.org - that discusses the ins and outs of completing 1031, tax deferred, like kind exchanges.

The like kind exchange is an amazing opportunity to defer capital gains taxes unique to real estate investing and a few other asset classes. If you have been or want to be a real estate investor and these terms are unfamiliar, it’s time to get educated. Also feel free to drop a line to me with preliminary questions. I don’t give out tax or legal advice but I’m glad to get you started

If you just have a handful of your 45 days left to identify replacement property to complete a 1031 tax deferred exchange, are striking out and are going to face a major tax hit as a result, now is the time to consider tenant in common investments (commonly known as TICs).

When you buy a TIC, you get an “undivided” interest in (most cases) a big, sexy asset that you would otherwise not be able to afford.

The upside, you presumable own better real estate than you’d be buying with your six figure chunk of change, You also avoid any management hassles: the TIC organizer (called a “sponsor”) is going to take care of those hassles for you (and make a lot of fees going in, along the way, and going out).

The downside: The fees of course…and a serious lack of liquidity. There’s no one making a resale market for TIC interests (at least no one I know of). Perhaps there’s an opportunity there.