Did you know it’s possible to do a 1031 exchange into a syndication? Many investors and syndicators don’t even realize that this is an option. It is somewhat complicated, which is why we have invited Alex Shandrovsky & Michael Brady onto the show with us today. Alex and Mike are both experts on 1031 exchanges.
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In today’s episode, they walk us through some of the basics of what a 1031 exchange is. We learn about some of the benefits of doing this type of exchange and why it is such an attractive opportunity for investors. Alex and Mike also shed light on some of the more technical aspects, such as complications that come with doing a 1031 exchange into a syndication, the role of the 1031 investor in the syndication, and how to structure a deal with this type of investor. We discover that 1031 exchanges require in-depth knowledge which is why it is so important to have an expert on your team. Be sure to tune in today!
Key Points From This Episode:
- Alex and Mike’s backgrounds and why they are an ‘odd couple.’
- An explanation of a 1031 and what would motivate an investor to do this kind of exchange.
- Two sets of challenges that come with bringing a 1031 investor into a syndication.
- The root cause of why 1031 exchanges into syndication can be so complicated.
- Two ways that the same investor can be on both sides of a 1031 exchange.
- An explanation of the tenant in common structure and how their returns would be handled.
- Some of the most common hurdles with the TIC structure.
- How to get started if you want to bring a 1031 investor onto a syndication.
- Find out whether syndicators need permission from investors to bring 1031 investor onto a deal.
- Other problems general partners might encounter with having a 1031 investor on-board.
- The role that Madison 1031 or another qualified intermediary play.
- The two important things a tax payer has to do to defer their gain.
- Setting up the legal structure of a TIC is simple, but the operating structure is difficult.
- Many investors do not even know about the possibility of a 1031 investment.
- A look at how a 1031 investor would move from one deal into another.
- How to get in touch with Alex and Mike.
[bctt tweet=”You would be surprised as to how many people don’t believe you can do a 1031 onto a syndicate. — Alex Shandrovsky” username=”whitney_sewell”]
Links Mentioned in Today’s Episode:
About Alex Shandrovsky
Alex Shandrovsky is a Silicon Valley seasoned entrepreneur. Starting with a $3,000 Loan, He built a multi-million dollar catering business serving leading tech companies including Google, Airbnb and Favebook. . He has been featured in numerous publications including Haaretz, Newsweek and San Francisco Chronicle and has studied Digital Marketing at Dartmouth University Business School. As a Senior Business Development representative for Madison 1031 Exchange, Alex has the privilege of building multigenerational wealth for driven real estate investors. He is a proud husband and father to 3 adorable children.
About Michael Brady
Michael S. Brady is Executive Vice President of Madison 1031, a national Qualiﬁed Intermediary for tax-deferred Exchanges pursuant to Internal Revenue Code §1031. As a Certiﬁed Exchange Specialist® and attorney, his responsibilities include consulting with clients and their advisors to provide guidance on the regulations affecting §1031 Exchanges, as well as overseeing Madison 1031 Exchange’s national sales and marketing efforts. His seminars have received rave reviews for being both entertaining and informative, and his audiences have included top law and accounting ﬁrms as well as brokerage companies nationwide. Mr. Brady has published many articles on tax and legal issues and is the primary author behind the Madison 1031 Zone blog. Prior to joining Madison 1031, Mr. Brady headed up three other leading 1031 exchange companies, overseeing several thousand 1031 exchange transactions during his career. As an attorney, Mr. Brady has over 25 years of experience representing clients in commercial and residential real estate transactions, as well as a wide variety of business transactions and commercial litigation matters, and has acted as general counsel to a title insurance company.
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