1031 Exchange
Medena Equity Group specializes in helping investors connect to 1031 Exchange opportunities.
Annualized Returns for 1031 Exchange Investments can range from 17.00%-28.00%
1031 Exchange Explained
A 1031 exchange, also known as a like-kind exchange, is a tax-deferred transaction that allows an investor to sell a property and reinvest the proceeds into a similar property without paying capital gains taxes on the sale. The exchange must meet certain time sensitive requirements: The investor must identify a replacement property within 45 days of the sale of the original property. The investor must then complete the purchase of the replacement property within 180 days of the sale of the original property. The replacement property must be of equal or greater value than the original property, and any debt on the original property must be either paid off or replaced with new debt on the replacement property.
Investors should expect to hold the property for a minimum of 7 years; however depending on the entity structure and percentage control the investors holds, they could have full autonomy to sell at any point. Medena Equity Group simply recommends they hold for a minimum of 7 years to ensure maximum profitability.
Project Hold Period for Optimal 1031 Exchange Return
After understanding the 1031 investors specific buying parameters, Medena Equity Group will search for and identify properties that fit the 1031 investors buying parameters. From there, Medena Equity Group will serve as the operator of the property for the life of the project unless otherwise agreed upon. They will be responsible for any and all renovation, property management, tenant search and placement, rent collection, maintenance requests, unit turnover, investor payouts, tax document distribution, LLC documentation and upkeep, selling process, and anything else associated with the ongoing operation of the project. The investor should have very little, if any, ongoing responsibility of the project. An investors primary responsibility is to invest the initial capital, and collect their cash flow. Everything else will be handled by the operator.
Medena Equity Group Role and Responsibilities
Investor Responsibility
Investors who express interest in this type of real estate opportunity would need to qualify for a mortgage using one of our preferred lenders, or their own. Medena Equity Group will search for and identify properties that fit the 1031 investors buying criteria. Once identified, the investor can present the property to their qualified intermediary within 45 days of the sale of their previous property. To secure their position as owner/investor, the individual or group of investors would be responsible for the Earnest Money Deposit which is generally 1% of the purchase price (and it is 100% refundable if the deal falls through). Upon closing they are responsible for transferring the capital required to fund the deal through their qualified intermediary. They would also be responsible for their own tax situation.