INVESTMENT

They face the Tony and Ashley Talk challenge today


We all want to Imagine it Ashley Kehr And Tony Robinson The perfect investor. They make the perfect deal, have a perfect team and everything goes smoothly in their lives. Although they are two great investors, they still are Most entrepreneurs and real estate investors also face that challenge Off camera.

From Glossy object syndrome To give up the entrepreneurial realms, Tony and Ashley pressed a lot into this rookie response. If you think you were Being annoyed at your ride Or simply Too Concerned Take the next step, Remember that Tony and Ashley felt the same way.

If you want Ashley and Tony to answer a real estate question, you can post on the Real Estate Rookie Facebook group! Or, call our Rookie Request Line (1-888-5-ROOKIE).

Ashley Kehr:
This is a real estate rookie. Episode 120. My name is Ashley Kehr, and I’m here with my co-presenter Tony Robinson. And here we are.

Tony Robinson:
Another time in Las Vegas. So Ash and I did our nice little setup in the living room area of ​​the Venetian hotel. So if it feels a little different, that’s because. But we like recording together personally. It’s like a different energy, a different vibration. We can stay in the same place. I feel like the conversation … This is our third episode that we recorded today and the conversation with the guests, I think they have more flow because we are sitting next to each other.

Ashley Kehr:
All right, yes. And it’s more of a conversation than an interview. So we’re going to print this Rookie Road Trip and we’re going to be interviewing in different cities-

Tony Robinson:
We’ll figure out where we’re going next. I always had Paris on my list. Do you think we can find some rookie in Paris?

Ashley Kehr:
It may be difficult to travel to Europe at the moment due to the Kovid restrictions, but yes, sure. I went there once, but it was long ago. So, we’ll go again.

Tony Robinson:
We’ll fix it.

Ashley Kehr:
All right. We’ll do an episode about internationally purchased property.

Tony Robinson:
We’re getting started.

Ashley Kehr:
Internationally. [crosstalk 00:01:03].

Tony Robinson:
It is global.

Ashley Kehr:
Yes yes. Okay, so today we’re going to answer a rookie from the Facebook page.

Tony Robinson:
All right. And I got it here on my phone. So today’s question comes from Vince Riaz of the real estate rookie Facebook group. So again, if you guys don’t join the real estate rookie Facebook group, you’re doing yourself a disservice. There are over 1,000,000 plus members and it is honestly one of the most active, one of the most engaged real estate Facebook groups I have ever participated in. Any time I try to answer someone’s question and go there, I usually can’t because there are already 10 or 20 good answers to the question. So if you want community [inaudible 00:01:38] Support, this is a good place. But anyway, that’s where today’s question comes from. So today’s question comes from Vince and Vince’s question is, “I’m going to exchange 1031. Can I refinance the cash on the second property to get the most assets or am I still liable for taxes? Thanks in advance. “Have you exchanged 1031 yet?

Ashley Kehr:
I don’t, but for the investor I’ve worked for, I’ve done a couple with him. Would you like to briefly explain what the 1031 exchange is?

Tony Robinson:
A 1031 exchange is literally Section 1031 of the IRS Tax Code which allows you to avoid paying capital gains tax on the sale of investment property if you use that money to buy another property. Now there are some limitations and things you can and can’t do, but that’s normal. And a lot of people use it because it allows you to avoid those taxes. So we actually sold a property in Joshua Tree just 40 days ago and you got 45 days which they mark as replacement property. So you have 45 days to identify the property you are going to buy from another sale and you get 45 days to buy one. So we’re in the middle of it right now. Now the question is, can you refinance the cash in the second property to avoid paying taxes? And the short answer is yes.

Tony Robinson:
This is something that we have seen to do with our 1031 exchange, basically burning another property with the money received from 1031. So say for example you have 10 1031 to $ 100,000, you go out and you pay, I don’t know, $ 50,000 is cash for a property that costs and you spend another $ 50,000 to renovate it. So you spend all your 50,000 … oh wait, no, you know what? It won’t actually work. It won’t work in a bar until it’s out of pocket for rehabilitation because you have to use the full money-

Ashley Kehr:
To buy.

Tony Robinson:
To buy. So I guess it won’t work in a bar in that sense, but if you pay cash for the property and then you pay out of pocket for rehabilitation, you can still make the hole that way.

Ashley Kehr:
Yes. Or you can first use the money from the sale of the property as a down payment and get financing and then grind your own and then you can refinance from it. So you’re paying the closing price twice, but if it takes you to the property and the numbers still work, you can do it that way.

Tony Robinson:
And probably cheaper than paying taxes on what you did.

Ashley Kehr:
One thing you also said is to avoid taxes and you are really pushing them back.

Tony Robinson:
True.

Ashley Kehr:
So just to make it clear, that if you sell in the end, you exchange 1031 for one asset, then another asset, and you continue these sales and move on to bigger assets and improved cash flow assets, if you sell in the end. And do not exchange 1031 which will start paying tax arrears. So you don’t have to exchange a 1031 once, those taxes are done forever. You can still give them.

Tony Robinson:
That’s a good thing. But what many investors do is call it a swap until they drop. So you basically keep 1031 for your whole life. And then if you do, you never have to pay taxes. I think there are some reactions, like if it goes to your heirs or something like that, I think there is a recovery.

Ashley Kehr:
Yes, tax base or something for them. But I am not very wise [crosstalk 00:04:50].

Tony Robinson:
We are not tax professionals.

Ashley Kehr:
I was at a [inaudible 00:04:54] At one time, long ago, but I don’t remember.

Tony Robinson:
Do not take it as professional advice. These are just two people sitting in a hotel room in Las Vegas giving us our best idea of ​​what’s going on.

Ashley Kehr:
The day after tomorrow the pool party. So, with the 1031 exchange, there is definitely something that can really help you create wealth. So you are upgrading to features. One thing to keep in mind when exchanging 1031 for this other investor is that you need to use an intermediary. You go to someone who is basically a 1031 exchange company, and you pay them 1200 rupees or a fee and they handle 1031 exchanges for you. Another thing that I remember is that when you exchange 1031, you have to go to the same entity that sold the property and the ownership interest has to remain the same for two years. So if Tony and I own a property and we sell it, with funds from that, Tony can’t take some money and buy something and I can’t take it and buy something. We have to go and use that LLC together to buy another property and hold that ownership interest. I believe it’s two years that you have to keep the same ownership and can’t change partners.

Tony Robinson:
Yes. These are really good points. Another thing I recently found in us is that you don’t necessarily have to use all the funds. Say you get $ 100,000 and you end up spending 70 of that, then 30,000 comes back to you from the intermediary and then you tax the entire 100,000 instead of the 30,000. So there are some subtleties out there, but it’s a really powerful tool. Just to give you some background, we had a property, we spent like that, I don’t know, I think we had a down payment … We had a total cash to close this house 35, 36, I think maybe ,000 38,000 . We sold it and the goal is that we are going to invest $ 38,000 and we will be able to purchase a property around $ 900,000.

Tony Robinson:
That’s the power of the 1031 exchange, that you can take a little money, put it into a property, let the value of that asset appreciate over time, sell and then move on to something bigger that creates a bigger cash flow.

Ashley Kehr:
Especially in today’s market now, you see the appreciation is really accelerating in many markets. And it’s a great time … for me, for example, I got rid of a little duality that has been so much appreciated since 2018 and I really didn’t do anything for it, but it was a headache property and this time it was coming out and It sells.

Tony Robinson:
Even with the big market, I still can’t sell this house in Shreveport. So if any of you are interested, you know where to find me.

Ashley Kehr:
I’m actually disappointed because the last episode we just recorded here with our guest Jay. We did not mention that property for sale.

Tony Robinson:
We don’t.

Tony Robinson:
But we’ve done that in previous recordings, so. Well, thank you so much for joining us. I’m Ashley থWealthFromentals and she’s Tony Instagram Tony J. Robinson on Instagram. Check out our YouTube channel, Real Estate Rookie on YouTube. Every week a new video is released that is made especially for rookies. Thank you guys and we’ll be back with one of our guests on Wednesday.





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