1031 Exchange Property Example - Austin Zahn Real Estate

Redondo 4 Unit 1031 Exchange Example Turn This, Into... What If You Could This! Or... This! Or... This! Or... This! Or...

Get Your Zero Obligation 1031 Exchange Cashflow Comparison!


How Does a 1031 Exchange Work?

A 1031 exchange allows you to sell your investment property and exchange it for another property of equal or greater value. This allows you to defer paying any capital gains tax from the sale of your original property. It is also an amazing opportunity to increase your monthly cash flow! Here are a few of the basics:

1031 Exchange - Like Properties Rule

Investment Properties
Qualify

Any property held for investment, income producing or not, qualifies to exchange any capital gains.

1031 Exchange - Reinvest All Proceeds Rule

All Proceeds Must be Reinvested​

To defer payment of capital gains taxes after a sale, all proceeds must be reinvested. Therefore the new replacement property must be of equal or greater value.

Title Must Be Held in Same Entity​

The ownership entity on title for the replacement property must be identical to ownership entity on title for the relinquished property, unless held in TIC.

1031 Exchange Cashflow Comparison

Let’s look at some key details for this 4-unit exchange (any size deal is eligible) and compare available exchange options.

Sale Price
Debt
NOI
CAP Rate
Pre-Tax Cash Flow
Cost of Sale (5%)
Net Proceeds
Net Monthly Income

Let's Compare!

Advanced Auto Parts

15 year corporate lease.
5% increases at each option.

Purchase Price: $2,895,000
Down Payment: $1,650,000
Loan Amount: $1,245,000
Yearly Debt Service: $78,859
NOI: $173,700
CAP: 6%

Avg Monthly: $7,903

Denny's

Brand new 20 year lease.
8% increases every 5 yrs.

Purchase Price: $3,095,000
Down Payment: $1,650,000
Loan Amount: $1,445,000
Yearly Debt Service: $91,527
NOI: $201,175
CAP: 6.5%

Avg Monthly: $9,846

Aspen Dental

10 year corporate lease.
10% increase at year 6.

Purchase Price: $2,659,262
Down Payment: $1,650,000
Loan Amount: $1,009,262
Yearly Debt Service: $63,927
NOI: $179,500 
CAP: 6.75%

Avg Monthly: $10,113

BP Fuel Station

19 years on a new lease.
12% increases every 5 yrs.

Purchase Price: $2,855,172
Down Payment: $1,650,000
Loan Amount: $1,205,172
Yearly Debt Service: $76,336
NOI: $207,000
CAP: 7.25%

Avg Monthly: $12,890

On triple net leases, all EXPENSES, PROPERTY TAXES, and INSURANCE are PAID BY TENANT. Contact us for the latest available investment properties!

Compare listings

Compare