What’s in it For Me?
If you are thinking of carrying out a 1031 exchange, you might be wondering, “What’s in it for me?” A 1031 has the power to transform your real estate investing strategy. More specifically, a 1031 offers you a chance to defer capital gains taxes and get your proceeds working for you. In order to qualify for a 1031, your intent must to hold the property for investment purposes only. What you will find is that as you hold your property for investing, it will also hopefully be accruing appreciation. With more equity to toy around with you are on your way to leveraging your first investment property into something better.
Once you are ready to exchange your first property, it is time to get imaginative. A 1031 gives you immense freedom when finding a replacement property. While primary residences, personal property, and inventory (fix and flips) are not allowed with a 1031, all other types of investment real estate are on the table. You can even leverage your first property into multiple replacement properties. A 1031 offers you a real chance to snowball wealth and build your fortune.