|
|
|
Replacement Property
There's a lot riding on your decision...
more than just simple tax deferral.
Your replacement property selection will impact your monthly cash flow, overall portfolio value, and
future liquidity. Therefore, property selection is key. That’s why you should turn to Direct Capital Securities
for your next 1031 exchange. We have consistently provided our clients access to quality, diversified replacement
property options. With Direct Capital Securities you may choose from a variety of traditional TIC investments
including Multi-family Residential, Multi-tenant Retail, Multi-tenant Office, and Hospitality properties.
In addition, we can introduce you to the world of Oil & Gas replacement properties that may enable you to achieve
a more diversified portfolio.
We perform personal, independent due diligence on each property we present to you. We focus only on
properties that exhibit solid management and stable cash flows--providing the groundwork necessary for you to
make an informed decision.
Tenant-In-Common Replacement Property
A Tenant-in-Common, or TIC, is designed to allow real estate investors to purchase ownership in an
institutional-type property with a minimum investment. This structure opens the door to replacement
property opportunities that may often times be beyond an individual person’s means if he or she were to
try to purchase it alone. TIC replacement properties offers the potential for stable monthly income
generated by established, investment-grade tenants on long-term leases. In addition, TICs offer the
benefit of peace-of-mind with hands-off property management as well as the opportunity for growth through
appreciation.
TIC property asset types include:
– Multi-tenant Residential
– Multi-tenant Retail
– Multi-tenant Office
– Hospitality Properties (hotels, golf courses, etc.)
Tenant-In-Common Risks:
– TIC interests are only available to accredited investors
– TIC interests are subject to the usual risks of real estate
– TIC interests cash flows and returns are not guaranteed
– TIC interests involve fees that may offset tax savings
– TIC interests are generally illiquid. There is currently
no secondary market
– TIC interests require a high level of due diligence
Energy Replacement Property
As "like-kind" replacement property, ownership in Energy replacement properties qualifies for the 1031 tax
deferral––just like a Tenant-in-Common. Energy replacement properties can produce stable monthly cash flow,
have the potential for higher rates of return than traditional TIC investments, are historically more
liquid and offer hands-off ownership. One of the many advantages of energy assets is that, unlike buying a
building, an energy asset purchase can often be tailored to the exact valuation required for your exchange.
Some alternatives on the market even provide the ability to tailor the exact amount of debt desired by an
investor. This is of particular interest to 1031 exchangers looking to match debt to avoid boot. In addition,
many Energy replacement property options offer a much lower minimum investment requirement than many traditional
real estate or Tenant-In-Common (TIC) investments.
Energy property asset types include:
– Royalty Interests
– Working Interests
– Royalty and Working Interests blend
Energy Replacement Property Risks:
– Oil & Gas interests are only available to accredited investors
– Oil & Gas interests are subject to the usual risks of energy
– Oil & Gas interests are depleting assets
– Oil & Gas interests cash flows and returns are not guaranteed
– Oil & Gas interests involve fees that may offset tax savings
– Oil & Gas interests are generally illiquid
– Oil & Gas interests require a high level of due diligence
|
|
RESOURCES
Text of Section 1031 from
Cornell University
Legal Information Institute
"A 1031 Exchange Vehicle for Small Investors" An article from National Real Estate
Investor magazine
PDF download
"TIC Reinvestment Strategies" An article from National Real Estate Investor magazine
PDF download
Direct Capital Securities, Inc. Replacement Property Brochure
PDF download
Do you have a question?
Email us and we will
respond within 24 hours.
info@1031market.com
|
