Leveraging 1031 exchanges in real estate investing was once described as the most wealth-building strategy there is. So, how exactly can you use this strategy in your real estate business and keep growing your assets, all the while avoiding large taxation? Find out the answer to this question in today’s #Highlights episode where we feature our conversations again with certified public accountant Ted Lanzaro and real estate entrepreneurs Alex Shandrovsky and Michael Brady.
Our Gracious Sponsor
FIRE Summit 2022
Did you know that multifamily is one of the most recession-resistant strategies to create long-term equity and cash flow, and build wealth through real estate that can save you big on your taxes?
You don’t want to miss Think Multifamily’s annual Fire Summit conference on November 11th & 12th.
Go to thinkmultifamily.com/Fire for more information and to register today!
Enter Promo code: Whitney100 to save $100
Watch the episode here:
Listen to the podcast here:
Ted talks about 1031 exchanges and how they can be used smartly for increasing your net worth. Meanwhile, Alex and Mike shed light on some of the more technical aspects, such as complications that come with doing a 1031 exchange into syndication, the role of the 1031 investor in the syndication, and how to structure a deal with this type of investor. Listen now!
Key Points From This Episode:
- Deferring capital gain on a sale and increasing net worth through a 1031 exchange.
- The role of market timing in this exchange strategy.
- Basic concepts to understand when considering a 1031 exchange.
- Leveraging these timeframes in smart ways and giving yourself some extra runway.
- Cost segregating properties and how this fits into the 1031 model.
- 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 come with bringing a 1031 investor into 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.
“It’s one of the available strategies to defer capital gains on the sale of a property. It’s probably in my mind, the most important wealth-building strategy in real estate investing.” – Ted Lanzaro
“The way it works is that when you sell a property, all of the proceeds of that property go into escrow, or what’s called a qualified intermediary. It’s somebody who facilitates 1031 Exchanges. At that point, you have 45 days to identify properties. You can either identify up to three properties of any market value, or you can identify more than three properties, but they can’t be more than double what the value of the property you’re selling is.” – Ted Lanzaro
“1031 exchange is a term-free, interest-free loan from various levels of government. We’re talking about the federal government as well as the various states and some cities that actually impose taxes on capital gains, that allow you to go out and buy bigger, hopefully, more profitable properties.” – Michael Brady
“I learned much more about real estate and real estate services, which brought me to Madison 1031 but I look at from, the small business operator as looking in and being able to create the most effective investment possible.” – Alex Shandrovsky
About Ted Lanzaro
Ted Lanzaro is a Certified Public Accountant and real estate investor with over 29 years of real estate consulting and investing experience. He is also the author of The Tax Smart Landlord, a book of tax strategies for real estate investors. Ted has helped thousands of investors nationally save millions of dollars in taxes in his career.
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 Facebook. . 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.
Love the show? Subscribe, rate, review, and share!
Join the Real Estate Syndication Show Community: