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Airbnb hosting & Airbnb Property Management in Dallas & Fort Worth

Airbnb hosting & Airbnb Property Management in Dallas & Fort Worth

Don’t know where to find the perfect place to stay in Dallas or Fort Worth? Don’t worry, I’ll teach you how to find the best accommodation deals in these places using Airbnb.
What you’ll learn:

  • Airbnb Hosting in Dallas and Fort Worth: Finding the Best Place to Stay
  • Airbnb Hosting in Dallas and Fort Worth: 3 Advantages Revealed
  • How to Utilize the Airbnb Dallas and Fort Worth Portals (COMPLETE Tutorial)
  • Airbnb Property Management in Dallas & Fort Worth
  • How to Choose the Right Airbnb Property Management Provider

Airbnb Hosting in Dallas and Fort Worth: Finding the Best Place to Stay

Airbnb is an online marketplace portal that advertises available home-for-rent and other leasable spaces within a particular area to serve travelers. Currently, Airbnb actively operates in 65,000 cities and 191 countries.

If you are in Texas and found no place to stay overnight, you can check the Airbnb hosting in Dallas for temporary accommodation. If you want to spend the night in Fort Worth, you can also visit the Airbnb listing in Fort Worth here to find the best places to check in.

Airbnb Hosting in Dallas and Fort Worth: 3 Advantages Revealed

1. Property Posting:

If you want to advertise your property in Dallas or Fort Worth as a subject for a lease, you can post a listing on Airbnb for FREE.

The portal will only earn once a client reserved your property. After the confirmation of the booking, the Airbnb would ask for a 6-12% service fee from the client that is completely non- refundable.

2. Guest Gains:

One of the advantages of using the Airbnb service is the opportunity to select the perfect space since the portal would display a wide array of suggestions. You can even filter the results, like changing the language, setting the preferred type of amenities, and even grouping the result by rates.

Recently, the Airbnb also made a service expansion to cater the demands of the clients, such as adding restaurants and leisure parks.

3. Protection:

The Airbnb cannot provide a full assurance that your property would be free from any client- inflicted damage. To safeguard your property, you may require a Security Deposit to the guest before he or she can complete the reservation. Through the Security Deposit, the guest agrees to shoulder any property damages within his or her stay.

How to Utilize the Airbnb Dallas and Fort Worth Portals (COMPLETE Tutorial)

1. Book Early:

If you want to find the best place to stay while you are in Dallas or Fort Worth, you must book days or weeks ahead of time.

Here are the steps to place your early booking on Airbnb:

  • Install the Airbnb app or visit the Keep in mind that there’s no third- party domain for all the Airbnb transactions.
  • Enter your personal details. This may include the number of clients or guests, dates, and destination.
  • Select the type of room that you wish to rent. You can choose from the shared room, private room, or an entire home. You can also use the ‘Filters’ option to make the suggestions more specific.
  • After determining the specific type of home, the next thing that you must do is to click the ‘Contact Host’ if you want to ask some questions to the owner. If you want to proceed with the booking, just hover directly to the ‘Request to Book’ tab.
  • If you are new to Airbnb, you need to create an account before you can completely book a property

2. Examine the Location
3. Read Several Reviews for Your Reference
4. Check the Identity and the Veracity of the Host
5. Send an Email or Private Message to the Host
6. Check the Cancellation Policy and the Fine Print
7. Look for any Rate Adjustments for Longer Stays
8. Verify the Location of the Property
9. Place a Deal on Airbnb Portal

Airbnb Property Management in Dallas & Fort Worth

If you want to gain high profit in listing properties in Airbnb in Dallas or Fort Worth, it’s time for you to tap an Airbnb Property Management team.

What’s the use of employing Airbnb Property Management?

It’s for one thing- to WIN in the competition!

You cannot just get confident after posting stunning photos of your property on the website, much more that you cannot expect positive results by just furnishing your listed vacation house with the complete amenities.

What you need is a reliable Airbnb Property Management team that will do the job in maintaining your rental houses, such as processing of new reservations, facilitates checking in of guests, replenishing household supplies, and cleaning the entire property.

The Airbnb Property Management team would also ensure that the standards that you set are always met. This way, you will get more guests, not only from Dallas or Fort Worth but from other states and cities as well.

You’ll employ a property management team to make sure that the guests are fully satisfied with your property and would head back for another booking soon.

How to Choose the Right Airbnb Property Management Provider

  • Consult Search Engines:

To determine the most reliable Airbnb Property Management manager or provider, entering simple keywords on search engines would help. Consider the top three suggestions since they are the most reliable service providers based on guests’ reviews and Google algorithm.

  • Don’t Focus Much on Photos:

Instead of focusing on beautiful photos, make sure to read several reviews of a particular property management provider. Especially, that you are doing business in Dallas and Fort Worth wherein the competition is so high.

  • Check What You’ll get After Payment:

You need to ask the provider regarding the specific service or task covered in a particular contract or deal. Be careful with people who offer much out of a lower rate, most of these people are just hoax.

  • Set Your Priorities:

It is important to immediately inform your property management team regarding the specific area that you would like to improve. If you are after for the cleanliness of your property, make sure to tap the help of a provider that is known for such forte.

  • Talk:

You need to establish a firm relationship with the people, who will later on, do some significant maintenance to your property. You can compare your conversations with the Airbnb property management in Fort Worth with the one in Dallas and decide which of the two is the best pick.

Hope you get a lot of information regarding Airbnb in this article.

SHARE your thoughts now in the comment section.


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Passive Income Real Estate Investing in Dallas & Fort Worth

Passive Income Real Estate Investing in Dallas

Do you want to know how to earn from passive income real estate investing in Dallas?

Well, you landed on the right page. Today, I’ll tell you all the information regarding passive income, real estate investing, and other good things in Dallas, TX!

I’ll cover the following topics:

  1. Passive Income Real Estate Investing in Dallas: Why Invest in Dallas, TX
  2. How to Buy An Investment Property in Dallas
  3. Things to Know About Investing in Turnkey Real Estate in Dallas
  4. Benefits of Passive Income Real Estate Investing in Dallas
  5. How to find a property in Dallas for Passive real estate income

Let’s start!

Passive Income Real Estate Investing in Dallas: Why Invest in Dallas, TX

Real Estate Investing pertains to purchasing a property with the intention to gain a profit.

Investing in real estate is deemed to be one of the most ‘secured ways’ of earning money. This type of investment is ‘overwhelmingly stable’ that even during times of high inflation rate, is still invulnerable.

In fact, Robert Kiyosaki, financial expert and the founder of the Rich Dad Company, said that there’s money in investing in real estate even during a major market collapse.

If you want to engage in real estate business, you don’t need to lay a huge capital. Start investing in real estate for as low as $5,000 (partnership venture) or if you have enough capital, you can start at $50,000

Aside from stability and low amount of capital, real estate business could also bring the following advantages:

7 INCREDIBLE Advantages of Real Estate Investment (as told by the EXPERTS)

  • Passive Income:

This is the edge of investing in real estate; you can earn passive income while doing nothing at all.

Let say you acquire a rental property, expect a continuous cash flow even if you are sleeping or on a vacation. The property will generate an income for you without the need for close supervision and management.

  • Building Future Equity:

Equity or shareholder’s equity refers to the money that would be reimbursed to a shareholder after liquidating all the company’s assets and paying all the outstanding debt. In other words, equity is part and parcel of your net worth.

Upon completely paying your mortgage, you also built equity. And as you keep on adding equity, you can also have the leverage to procure more properties and eventually improve your cash flow.

  • Impact on the Community:

While it is true that the main objective of investing in a real estate property is to gain profit, there’s also a noble benefit of doing this- your impact on the community.

You can help people in the community by providing them affordable housing units. You also help propel the local economy through your tax revenues.

  • Perks of Owning a Physical Asset:

Since real estate capitalizes in the physical assets, you are not affected by any market crash. This kind of stability and protection make the real estate investment far way better than engaging in stocks and bond ventures.

  • Tax Benefits:

Aside from a sure way of growing your wealth, real estate can also do the tricks of lowering your tax bracket.

  • Provides Leverage and Easy to Finance:

Real estate assets are easy to finance. You are even allowed to borrow up to 90% of the total acquisition cost. In most cases, these acquisition costs are so attractive and usually fall below the expected investment return.

This process of augmenting the investment return with external financing is called positive leverage.

  • Real Estate Value Appreciates:

Another benefit of investing in real estate is that it surely appreciates over time. The value of real estate properties mainly augments for two reasons:

  1. As the number of people who are interested to bid in a real estate venture increases, the yield or cap rate also goes up.
  2. With the rapid increase in construction cost and high demand of house rental, the rates of the real property establishments also increase.

Do you know that you can earn passive income if you invest in real estate in Dallas?

Here’s why.

Passive income is an earning from a limited partnership, rental property, or other enterprises in which a particular person is not directly involved. One of the best ways to earn passive income is through investing in real property.

Now, if you are searching for the best place to put up your real estate business and generate a passive income, you have to consider Dallas.

The population of Dallas, from 2010- 2015, exponentially grew, hence, opening rental apartments and other real property establishments in the city is a sure hit.

You can check some of the Dallas real estate investment firms if you have more questions regarding the status of the rental industry in Dallas.

Another reason why Dallas is best to set your real estate business is its financial stability. In retrospect, Dallas handled the last recession and continues to front a strong economy for the last five years.

You are also assured of the continuous influx of tenants in this city because most of the people who decided to move in Texas preferred to settle in Dallas.

Other reasons why you must invest in real estate in Dallas are the following:

  • According to a Forbes study, Dallas is the second fastest growing metropolis since 2016.
  • Dallas is the biggest city in Texas
  • Based on the Dallas real estate 2018 reports, there’s no reported case of profit loss in all of the real estate transaction in Dallas
  • Opened 661,000 new job vacancy since 2010 marking an all-time high job creation record in the entire US
  • Dallas is home to the world’s leading logistics centers
  • 26% of the total population of Dallas earns $100,000 of average annual income

With these reasons, it is safe to say that the right place to earn passive income in real estate investing is in Dallas, TX.

How to Buy An Investment Property in Dallas

Are you decided to buy an investment property in Dallas, TX? Or are you interested to engage in Dallas, Texas real estate market? The following information will make you equipped:

Based on the Dallas real estate market 2018 review, you have to perform the following preliminary measures before buying a property

  • Study the Market of Your Interest:

Study all the facets of the target market, including the ideal micro and macro investment sites. You also need to consider the A.B, C, D rating so as to fully understand the take of the people involved in your target market.

  • Create a Team:

Since you planned to earn passive income through investing in real estate, you need to build a great team. Remember, real estate is a team game so you need to recruit the brightest people in Dallas to help you win the game. These people will monitor, assess, and evaluate the performance of the business while you are away.

  • Establish Financial Stability:

While you can employ some sort of leverage (like debt) to procure a property, you still need to establish your financial stability as you go on with the business. If you want to learn how to handle debts and other financial tips, read here.

  • Save:

You need to have a stable financial portfolio if you want to succeed in real estate business. Though you can start with low capital, it would make a huge difference if early on; you already have enough backup accounts for any unprecedented events.

  • Get Leads:

Before you invest in real estate, make sure to get enough leads first. You need to research and find the best deals the market could offer for your business.

If you follow these preliminary measures, expect to get more favorable market deals. And from here, you will know the 5 steps of buying an investment property in Dallas.

5 Steps of Buying an Investment Property in Dallas, TX

1. Negotiation:

You need to negotiate with the owner or the seller of the property and offer a ‘win-win’ deal. In some cases, you might just be allowed to deal with a middleman, but still, do your best to come up with the best deal.

2. Due Diligence:

After entering a good deal, you have to observe the ‘due diligence’ time frame. Due diligence is simply the time allowance given to the buyer to inspect thoroughly the property that’s being sold. If major issues or problem is discovered, the buyer is allowed to retract the deal and void the contract.

3. Pre- Closing:

If you are fortunate enough to find no issues in the property within the due diligence period, the next step is the preparation to finally seal the deal. At this stage, you can prepare the request for a closing document and also the insurance title of the property.

4. Closing:

This includes the signing of documents, paying and receiving of funds, requesting for access keys, confirming the insurance, and taking photos to document the deal.

Things to Know About Investing in Turnkey Real Estate in Dallas

A turnkey property is deemed to be the ideal way to earn passive income in investing real property. This has something to do with purchasing a fully furnished property with an existing tenant.

You don’t need to drain yourself if you choose to invest in a turnkey property in Dallas, since majority of the people in the city are familiar with this type of arrangement.
Here are the things that you must know about investing in turnkey real estate property:

  • Before you engage to buy a turnkey property, make sure to ask the following questions: is the location convenient to the tenant? does the rate of the property match the status of the area’s market? do you want to hire a property manager or manage the tenants on your own? These questions are very important to address to check the feasibility of getting a higher return on investment.
  • Be aware that there are lots of fraudulent turnkey companies that sell a property for a low price and yet promise that you can get a high return of investment. To avoid deception, you must only deal with trusted people or those companies with a license to operate such business.

If you want to engage in turnkey investment, you must be willing to do extensive research. You need to understand the market status, also identify the areas where people are looking for turnkey properties.

If you live in Dallas, you can check the Dallas real estate analysis to get more information regarding the turnkey investment.

Benefits of Passive Income Real Estate Investing in Dallas

  • Steady Flow of Income:

Due to the financial and market stability of Dallas, investing in real estate there is a dependable source of passive income. In fact, real estate industry experts predict that Dallas will top as the best US city to put up a real estate investment.

  • Tax Benefits:

If you own a rental property, you are exempted from tax obligations. Tax exemption is the primary reason why investors preferred to align their track to real estate ventures.

Also, rental income is not taxable against the self-employment tax bracket if you engage in this type of endeavor.

  • Payment for Mortgage is Covered:

You cannot only maintain the property using the tenant’s payment, but you can settle your mortgage as well.

How to Find a Property in Dallas for Passive Real Estate Income

Investing in real estate is good, but how are you going to find a property in Dallas in which you can invest?

If you want to find the best places to invest in real estate in Dallas and eventually earn a passive income, I listed my five preferences below.

1. Dallas Properties in Coppell

  • Median Home Rate: $300,000
  • Median Rent: $1,100/month

2. Dallas University Park Properties

  • Median Home Rate: $1,000,000
  • Median Rent: $1,900/month

3. Dallas Investment Properties in Allen

  • Median Home Rate: $220,000
  • Median Rent: $1,300/month

4. Dallas Bluffview Properties

  • Median Home Rate: $600,000
  • Median Rent: $1,400/month

5. Dallas Lake Highlands Investment Properties

  • Median Home Rate: $280,000
  • Median Rent: $1,000/month

Do you find this article helpful?

Leave a comment below and let us know if you are interested to open a real estate business in Dallas soon.


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1031 Exchange for Doctors, Rules and Buying a Property

1031 Exchange for Doctors, Rules and Buying a Property

1031 Exchange for Doctors! Are you a doctor who wants to know the 1031 Exchange? No need for a real estate expert to explain this deal. Today is your lucky day since you’ll learn this tax-deferring trick for FREE!

Here are the things that you will learn after reading:

  • What is a 1031 Exchange?
  • How Doctors and Physicians can Benefit from 1031 Exchange.
  • What are the Rules of a 1031 Exchange 2019?
  • How Long do you Have to buy a Property With a 1031 Exchange?
  • How Many Properties can be Identified in a 1031 Exchange?
  • 1031 Exchange Steps

Let’s start by introducing the 1031 exchange for dummies!

  • What is a 1031 Exchange

The 1031 Exchange also called as Starker Exchange or Like-Kind Exchange is a procedure that allows an investor to sell or buy a ‘like- kind’ property without requiring immediate payment for the capital gains taxes.

However, prior to deferring the capital tax, the investor must first establish pieces of evidence proving that the capital used for the purchased of a new property is derived from the proceeds of previously owned ‘like- kind’ property.

This tax- deferring strategy is operating under the mandate of section 1031 of the IRS code; hence, the term ‘1031’ Exchange.

5 Advantages of 1031 Exchange (Finally Revealed)

1. Tax Scape:

This procedure is a ‘smooth’ way of skipping real property obligations, including capital gain, ordinary income, and depreciation taxes.

2. Augments Cash Flow for Reinvestment:

Deferring capital gain taxes would mean adding capital for purchasing a new ‘like- kind’ property. The savings would capacitate the investor to procure several properties with the hope of yielding positive Return of Investment (ROI).

3. Management Relief:

To keep yourself from getting burn out from high maintenance cost, 1031 would be your best ally. You can have a deal with another investor and exchange respective properties (without upfront payment of capital gain taxes) provided that the two properties operate under the same umbrella or industry.

4. Wealth Buildup and Asset Accumulation:

Real estate experts suggest that employing a 1031 Exchange strategy in running a business would actually mean yielding a high profit in the long run. Based on the reports of Breakwater Equity Partners, real estate investors who perform 1031 exchanges for decades would significantly increase their net worth and would pass the same financial stability to their successors.

5. Easy Changing of Property:

Under the provisions of the 1031 exchange, you are allowed to hover from one type of real estate property to another. Like for example if you want to swap your idle land lot to residential space.

  • How Doctors and Physicians can Benefits from 1031 Exchange

Medical practitioners would cut a large margin of their capital gain taxes once they master the 1031 Exchange rule.

For example, a team of US doctors built a hospital in 1993 amounting to $400,000 with a current fair assessment value of $1.2 million and under the sailing of $100,000 income tax obligations and then would like to expand and exchange it with a new and bigger facility.

If you target a $1.2 million selling price (of the old hospital building) you would get a $1.1 million sale’s profit ($1.2 million- $100,000).

If you carry out this deal, this would inflict a 15% federal tax rate. To avoid this huge tax liability, the management would rather prefer to engage in an exchange of property under the scope of the A71031 Exchange. With this scheme, the doctors would not only procure a larger facility but enjoy a $165,000 tax savings as well.

Medical practitioners can also utilize the 1031 Exchange rule to reduce the real estate selling price that would only benefit the clinic’s management. If they reduce the real estate liabilities, they can now top up the savings to their professional fee without compromising their original professional charge.

  • What are the Rules of a 1031 Exchange 2019

To qualify for 1031 Exchange, you need to consider the following rules:

1. Business or Investment Property Only.

You cannot avail the 1031 Exchange rule if you are dealing with personal property. Only swapping of business or investment properties are allowed under the provisions of section 1031 of the Internal Revenue Code.

Consider the following examples:

a. If you get married and decided to move residence to the place of your spouse, you are not allowed to swap your current primary residence for a rest house.

b. If you moved from Georgia to California, you cannot exchange your primary residence in Georgia for another primary residence in California.

(Check the 1031 exchange California to learn the scope of the exchange in different states)

c. If you own a rental townhouse property in Chicago, you can swap your property for another commercial rental house located in Texas.

2. Equal or Greater Value:

To completely defer from any real property taxes upon selling a property, make sure that the assessed equity and net market value of the newly purchased property is equal or greater than the sold property. If you cannot meet this requirement, you cannot qualify for a 100% tax deferment.

3. Like-Kind Property

The primary requisite to avail the 1031 Exchange is that the property being sold must be the same in form or in nature with the newly- acquired property. This is called as ‘like- kind’ properties. Only the ‘character’ and the ‘nature’ of the property are considered in the 1031 procedure, hence, you are allowed to exchange properties with a different grade or quality.

Here are a few examples:

a. It is allowed to swap a 3-room rental apartment property for a 3-story commercial building.

b. If you own a duplex, you can swap it for an apartment house.

c. You can also exchange your vacation house property for a commercial restaurant space.

4. Must Reflect the Same Tax Owner:

The title of the property and the tax return must contain the same name to qualify for 1031 exchange. However, there’s an exception to this rule in case you are dealing with a sole member limited liability corporation which is allowed to reflect the name of the other members.

Based on the 1031 exchange 2018 records, this rule was given much emphasis by the investors. Hence, you must not disregard the significance of checking the veracity of the papers of the other transacting party.

5. 45 Day Rule:

It is mandated that within 45 days, the property owner must identify up to three like-kind properties potential for exchange. This rule is quite challenging to comply since all the deals must conform to the financial perspective. Most of the investors tend to overprice their property quote especially in times of low interest rates.

6. No ‘Boot’ Allowed:

To enjoy a complete tax-free exchange, you must not receive ‘boot’ in the course of the transaction. ‘Boot’ simply refers to the tax fine for not complying with the requisites of the section 1031 (tax-deferred exchange).

7. 180-Day Purchase Leeway:

After trading a property and the due of the income tax return, it is required that within 180 days, the replacement property must be received by the new owner.
Want to know which of these rules is best to follow? Read here for suggestions. Also, do not forget to check the 1031 exchange rules 2018 reviews for some references.

  • How Long do you Have to buy a Property With a 1031 Exchange?

After the close of the relinquished property, the investor is only given 45 days maximum to suggest prospect replacement properties, and another 135 days to complete the acquisition of the replacement property.

  • How many Properties can be Identified in a 1031 Exchange

A maximum of three properties is allowed in 1031 Exchange as per directed by the 3 Property Rule. The taxpayer may suggest three replacement potentials and is also allowed to procure the three nominated properties.

  • 1031 Exchange Transaction Glitches That You Must Avoid

Like any other transactions, the 1031 Exchange also has some glitches. Whether you are looking at the provisions of 1031 exchange rules 2019, some issues are still inevitable.

Check them out now.

1. Early Fund Returns

There could be a time that a taxpayer suddenly decides to halt the transaction. When this occurs, the taxpayer is obliged to inform the exchange company about the matter and that he or she fully understands the responsibility of paying gain taxes.

You have to remember that exchange facilitators are only mandated to disburse funds at a certain point of the transaction and with a valid reason, and the sudden termination of a deal is not part of that disbursement coverage.

In cases like this, the client doesn’t need to worry since he or she is obliged only to pay applicable and due taxes.

The problem occurs when the facilitator tends to deviate from the exchange rules that may put the previous and succeeding exchange deals in jeopardy.

2. Not Knowing the Person Behind:

Make sure to confirm the identity of the person behind the 1031 exchange transaction.

You must validate the exchange firm if they, indeed, did not receive any designation request for a particular property that is subject for swapping.

If the taxpayer fails to do this, he or she is allowed to receive funds only after the process of identification to be conducted by the exchange company.

3. Payout Pitfall:

It is common for the taxpayer to provide a huge amount of money during the course of the exchange transaction. While there’s no wrong in showing financial stability, be aware also that prior to the purchase of the replaced property, any unsanctioned released of money is under the taxpayer’s responsibility. Under the rules, the taxpayer is not entitled to receive any form of reimbursement at the onset of the transaction.

  • 1031 Exchange Steps

There are certain steps to ensure you are doing 1031 exchange the right way. Read the steps below:

(Before Closing the Renounced Property)

1. Relinquished Property Addendum:

Make sure that you add the Relinquished Property Addendum (RPA) to the sale of the property contract. While this addendum form is not strictly required, this would somehow harness the intent to enter an exchange agreement between two parties.

Providing such details would also imply confidence in providing complete permission for the intermediary to do its tasks to prepare the necessary documents, and also divulge that there’s no outstanding liability for the buyer.

After the exchanger approved the contract on the renounced property, a copy of the contract must be provided to the preferred intermediary. Indicate also the name and phone number of the settlement attorney, including the escrow or company agent who will lead the settlement process.

Then, the Exchange and Escrow Account Agreement of Contract, Notification of Assignment, and instruction to the settlement body will be prepared by the qualified intermediary.
(After Closing the Renounced Real Property)

2. Preparation of Funds:

The settlement attorney then prepares the funds to the qualified escrow as sanctioned by the qualified intermediary. The copy of the exchange fee voucher and settlement statement will be released to all parties.

3. Identification:

After transferring the relinquished property, the exchanger is only given 45 days to nominate a replacement property.

This process has three provisions: the replacement must be received before the end of the 45- day period, it is allowed to nominate more than three prospects provided that they all constitute to a fair value, and to identify more than three replacement properties with a cumulative fair market value that does not go beyond 200% of the relinquished property.

4. Exchange Period:

After identifying the replacement property, you are given a 180- day exchange period to transfer the replacement property to your ownership.

5. Before Transferring the Replacement:

When the contract for the desired replacement is made, another copy of RPA must be provided to affirm that, indeed, the replacement property is of the same kind and is eligible for a like-kind exchange.

6. After Settlement:

Once the intermediary receives the final settlement statement of the replacement property, the intermediary will then pay any earned interest and return the excess escrow fund.

7. Report:

The final step is reporting the complete transfer of property as required by the annual tax return report. You may use Form 8824 (IRS) in your report.

With these benefits, are you ready now to engage in 1031 Exchange?

If you are a doctor, the more that you must master this tax- deferring trick.

So, when do you want to start the exchange?

Let us know by sharing your comments.


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What is the 1031 Exchange and 1031 Exchange Rules 2019

What is the 1031 Exchange and 1031 Exchange Rules 2019

Are you planning to sell a property but the thought of paying capital gain taxes is bothering you? Or do you want to know the latest updates of 1031 Exchange and 1031 Exchange Rules 2019? Stop worrying now; I will teach you all these with 9 bullets.

What you’ll learn:

  1. What is the 1031 Exchange Rule (Background and Principle)
  2. Types of 1031 Exchange (4 Common Types)
  3. What are the 1031 Exchange Rules (7 SECRETS Revealed)
  4. Why is the 1031 Exchange Important?
  5. The Process of the 1031 Exchange
  6. Who Will Hold the Money During the 1031 Exchange Process?
  7. How Many Times are Investors Allowed to do a 1031 Exchange?
  8. Three Property Rules that Must be Remembered
  9. Risks of 1031 Exchange

Let’s start the ball rolling now…

1. What is the 1031 Exchange (Background and Principle)

The 1031 Exchange Rule operates under the provisions of section 1031 of the Internal Revenue Code. This procedure is also known as Starker Exchange or Like-Kind Exchange that is used by financial investors to skip from capital gain taxes.

When you adhere to this rule, investing or swapping of one business to another is completely non-taxable.

There are several reasons why an individual may utilize the 1031 Exchange. Some of them are listed below:

  • You own a real estate investment and consider looking for a managed property to run.
  • You plan to diversify your assets and want to procure a property with a good return prospect.
  • You want to divide property and generate multiple assets or want to combine several properties into a single domain.
  • You may also avail this rule if you wish to reset the depreciation clock.

2. Types of 1031 Exchange (4 Common Types)

Delayed Exchange:

This is the most common type of 1031 Exchange. Under the Delayed Exchange, the investor is given a 180- day leeway [after selling the relinquished property] to determine a new property or a replacement property that the investor intends to buy.

Simultaneous Exchange:

This is considered as the oldest method of employing the 1031 tax-deferred exchange.

3 Ways of Performing Simultaneous Exchange

  • Three- Party Exchange:

There’s a need for an ‘accommodating party’ to carry out this kind of exchange. The ‘accommodating party’ facilitates the transaction of the taxpayer. This procedure has two formats: Baird and Alderson.

Under the Baird Format, the title is directly pass through the Seller, while in the Alderson Format, the title is transferred through the intended Buyer.

  • Two- Party Trade or Swap:

This occurs when two parties swap or exchange deeds with each other. Swapping is deemed better than the other simultaneous exchange procedures since there’s no need for a qualified intermediary. However, it is difficult to find a party that is willing to acquire your property the way you would want to take over the other’s property.

  • Simultaneous Exchange With QI:

If you want a Qualified Intermediary (QI) to do the task of preparing the exchange agreement and other documents, as well as providing written Instructions to the closing officers, this procedure is best for you. When you utilized this procedure, you are assured that you are at the ‘safe harbor’ since the Treasury Regulations of 1991 assured that only the reliable entities are permitted to enjoy the services of a QI.

Reverse Exchange:

This is also called as Title- Holding Exchange wherein it requires the purchased of the Replacement Property and closed the transaction before the Exchange Property is sold.

3. What are the 1031 Exchange Rules (7 SECRETS Revealed)

Rule 1: Same-Nature Property

In the world of investing, it is possible to exchange one property to another as long as they are assets of the same nature. This means that it is possible to exchange a house with a farm lot. It is also allowed to exchange multiple properties into one large property or the other way around. The exchange is valid as long as the new properties are like the original property that you had.

Rule 2: Business Property

The 1031 rule only applies to assets that are for investment or business. This means that you cannot exchange a primary residence you have in one city with another in a different city.

Rule 3: Value

When using the 1031 rule, it is important that the property that will be exchanged with is of the same value or higher. If the replacement property is of less value, 100% of the tax will not be deferred.

Rule 4: The 45-day rule

Within the 45-day period, a replacement property must be identified. It is possible to identify three properties and only buy one. However, if you are going to identify more than three properties, it must not exceed 200% of the total value of the property you are going to relinquish. If the value increases 200%, you will have to buy 95% of the identified properties.

Rule 5: The 180-day rule

The replacement property must be settled within 180 days. The replacement property is the property that will be exchanged with the one you are selling.

Rule 6: Debt Trading

There are times wherein the property that will be traded will have debt. If the properties being exchanged have debt, even if the new property being used to replace the property being relinquished is of higher value, it is important to calculate the debt difference.

If the debt difference is, for example, $200,000, then it is possible to just add this amount to the deal in order to prevent being taxed.

Rule 7: Tax Payer Name

The name that appears on the tax return and the title of the relinquished property should be the same name found in the tax return and the title of the new property.
If you want to know which exchange rule suits for you, further read this article.

4. Why is the 1031 Exchange Important?

The 1031 exchange is important because the price of real estate has already surpassed the “bubble level” which had happened a decade ago. As any good investor would understand, this is the right time to buy and sell properties in the market for cash flow opportunities.

As an investor, there are other numerous reasons why you should be aware of the 1031 Exchange rule. These reasons include searching for a managed property, looking for a property with better profit gains, merging multiple properties into one, saving an asset that has depreciated, or diversifying assets.

5. The Process of the 1031 Exchange

The first step is to identify the properties and see if it will be a good thing to use the 1031 exchange rule.

Calculate your gains in order to decrease the chances of losing money in your deal.

The second step is to look for a qualified intermediary that will be able to help you with the 1031 exchange. The amount that is paid to them is usually around $800 to $1000.

The third step is to put your property on sale.

After that, the fourth step is to look for a replacement property. Keep in mind that an investor has 45 days only to look for and identify a replacement property after his old property has been sold.

The fifth step is to sell the relinquished property.

The sixth step is to identify the replacement property and then the investor is given 180 days to purchase a replacement.

Learn more about the steps of 1031 Exchange Rule 2019 here.

6. Who Will Hold the Money During the 1031 Exchange Process?

During the process, the investor is not allowed to hold the money made from the sale of his property. That money must be kept by the chosen qualified intermediary of the investor until it will be used to purchase the property to be used for replacement.

The qualified intermediary would then ensure that the title and the tax of the old property will be the same as for the new property.

To further understand how an investor can better choose a qualified intermediary, it is advised to look at the treasury regulations.

7. How Many Times are Investors Allowed to do a 1031 Exchange?

There is no limit to how many 1031 exchanges an investor can do. The only requirement is that if an investor is exchanging a property, it must be of the same nature, and the value of the property that will be used for the replacement must be of the same value or of higher value.

There are some cases, however, wherein an individual does a lot of 1031 exchanges. This makes that individual some sort of a dealer.

In cases like these, that individual must prove that he or she is using those properties for investment purposes in order to continue using 1031 exchanges.

Read here to know more about the criteria for performing a 1031 Exchange.

8. Three Property Rules that Must be Remembered

  • Three Property Rule:

This means that you can identify a maximum of three properties that has the potential to be used as replacement property.

It is not necessary to buy all the three properties and you can just choose one of them.

It is also important that the address on the identification paper is complete and must be signed before handing it over to the intermediary that handles the 1031 exchange.

  • Two Hundred Percent Rule:

It is possible to identify more than three properties. However, the total market value of the identified properties must not exceed 200% of the market value of the properties which you have sold.

  • 95% Rule:

If the investor had taken the path of identifying more than three replacement properties, then he or she must settle the deal at 95% of the combined properties during the exchange period within the 180-day rule in order to avoid being charged with tax.

9. Risks of 1031 Exchange

The risk factors of the 1031 exchange can be found in the Private Placement Memorandum. These risks must be understood well by the investor in order to avoid profit loss. This will also help him or her to use the 1031 rule to his advantage.

These are the things that you need to know regarding the 1031 Exchange and 1031 Exchange Rules 2019.

If you find this article helpful, please leave a comment below.


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5 Features to Look for in a Residential Property Investment (2019 Update)

Investors in Texas will find that real estate can be a wonderful investment opportunity whether they are looking into commercial or residential real estate. However, that’s not to say that all of the properties out there are going to be good buys. There are certain elements that you should always look for when you are determining whether you should invest in a piece or property or not.

The Neighborhood

There are many wonderful places to buy investment real estate in Dallas, Texas. However, you will find that some of the neighborhoods will make for better purchases than others will. When you are looking at potential investments for sale in the residential sector, you should consider the quality of the neighborhood, as this will have an effect on the vacancy rate along with the quality of tenants you can attract.

While you are doing research on the neighborhood, also be sure to check the rate of crime. Areas that have a high rate of crime are going to be difficult to rent out, and when you can rent out the property, the price for the rental tends to be quite a bit lower than a similar home in a better area.

The more you know about the neighborhood, the easier it will be to make sure you are buying in the right location.

The Rental Prices

Take some time to look at the price of the properties in the area, along with the going rate for rent in properties that are very similar to the ones you want to buy. Is the rent going to be high enough to sustain the property and to help you make a profit? Are there often a lot of vacancies in the area? This could mean you are going to be competing against other property owners who are also looking for tenants.

Area Amenities

A residential investor needs to think about the type of people they want to have living in their properties. Knowing the amenities that are available in the neighborhood, such as parks, schools, shopping areas, and entertainment venues are all very important to prospective tenants, and they can be beneficial when it comes to marketing the property.

Property Taxes

The property taxes can vary from one area to another, so you need to understand what the property taxes are going to be on the property you want to buy. How much money are you going to be losing to taxes. Keep in mind that high property taxes are not always a bad thing, as long as you have chosen a great neighborhood, and you can expect to have some long-term tenants in the property.

Condition of the Property

While it might be enticing to buy a property in Dallas that needs a lot of work because the prices tend to be so low, investors have to remember that these properties will not be making money for them right away. Before they can bring in tenants to the property, they need to rehab the place and get it in good shape. This takes money and time. That’s not to say that investors should always avoid these types of properties, just that they should have a solid understanding of the properties condition before they make their purchase.

Plenty of investment properties in Dallas and Fort Worth are readily available, and many of them can make great choices for new and seasoned investors alike. Just be sure to check all aspects of the property to be sure it is the smart investment choice.


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Good News for Investors: Dallas Needs Medical Real Estate Solutions (2019 Update)

Real estate has always been a recommended choice when investors look for assets to diversify and stabilize their portfolios. Over the past eight years, however, we’ve seen a lot of upheaval in the real estate sector that has left investors baffled and uncertain. Fortunately, with the US economy on the mend and housing markets around the country recovering, that instability seems to be waning significantly. However, some markets are still more lucrative than others, and investors are still wary of making the wrong choice.

So what can you do? And where should you invest your capital? Healthcare real estate in Dallas is a market that many have not previously considered but which may prove to be incredibly profitable.

Rising Demand for Medical Care

First of all, thanks to the Affordable Care Act, more and more Americans are signing up for health insurance. Many do it to avoid paying a fine on their taxes in April, but once they have coverage, they want to take advantage of the services they’re paying for. Thus, we’ve seen a massive increase in the demand for all kinds of medical care in Dallas.

With doctors and other medical professionals booked solid for regular visits and emergency care, Dallas is in need of medical real estate solutions. With more office and clinic space, more medical practices can open, fulfilling more of this high demand.

And medical offices and clinics aren’t the only in-demand healthcare real estate in Dallas. While there has recently been a major influx of younger professionals moving to Dallas, the senior population of the city and surrounding areas has not dwindled at all. In fact, thanks to superior medical care, people are living longer than ever before, which means that they need geriatric care services. Investors would be wise to consider backing senior care facilities, as well as other medical real estate solutions.

A Stable and Lucrative Investment That Could Help Your Community

Basically, there’s a huge demand for more healthcare real estate in Dallas because people need medical attention when they’re sick and preventive care when they are well. From flu shots to elder care, there’s no shortage of need for medical real estate solutions here, and real estate investors can provide that solution by providing the funds necessary to build these facilities, offices, and clinics.

Essentially, when you invest in medical real estate, you’ll be almost guaranteed to see positive returns on your investment in short order. Not only that, but you’ll also be contributing to an improvement in your community, which will help to increase property values and potentially have a positive effect on your other investments in the area, as well. Consider investing in medical real estate and see how much you can help yourself and your community at the same time.

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How to find Commercial Real Estate That Will Generate Positive Cash Flow to You (2019 Update)

At InvestmentClub360‘ seminars, we face the usual question, “How do I get from investing in single-family properties to investing in larger and complex commercial real estate properties?”
If you are serious about making good money from commercial real estate investment, there are certain things you need to be clear about.
First of all, real estate isn’t a ‘get-rich-quick-scheme’ as most investors and dealers would like you to believe. It requires proper planning, patience, and hard work from your end.
Second, there has to be a sound investment strategy so that you’ll reap the kind of RESULTS you’ve been looking for. The investment plan has to be easy to understand and use, too. Here are few helpful steps that will help you find a ‘good’ commercial real estate property Dallas that will generate positive cash flow to you.

1. – Gather sufficient capital. Let’s face it – without sufficient balance in your bank, you won’t be able to finance a property. But that doesn’t mean you need to have 100% of your own cash to buy a commercial real estate, though.
You can borrow money you need from your lenders.
There are two important steps you can take to get approval for investment loans from your lenders. First, maintain a good credit score. Second, prove them you will be able to pay back on time. If you need more information on this, simply visit your attorney’s office and ask them how to apply for investment loans.

2. – Define the buying criteria. Next, sit down, take out a piece of paper and pen and define your purchasing criteria. For example, define the size, property type, and the location of a potential commercial real estate. Choosing a property located at a dense area could mean HIGH rental demand which could mean high rental income for you. On the other hand, a nice looking property in a remote place means very few people will visit and rent it.
Remember that each property type requires different type of skill levels to manage them and in return, they offer different ROI for the investors. To ensure you’ll make better ROI, make sure to fit your potential property to your individual requirements rather than other way around.

3. – Estimate the property’s value. Once you’ve taken care of the funds and defined your buying criteria, estimate the approximate value of that property based on your ROI requirements, its current conditions, and your purchasing power.

4. – Create offers that will be too good to reject. The next thing you must do is to identify ‘key’ strengths (unique selling point) of the potential commercial real estate that makes it stand out from other properties in the area. Use this USP to develop an offer that will be too good for others to reject.
Once your offer is accepted, expect to reap the rewards but also think about saving. There are two key elements of building wealth – asset protection and tax planning. Ask your local attorney to help you with this if you are purchasing a commercial property for the first time.

These 4 steps should help you figure out a way around an investment ‘wall’ that most beginner investors face.

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6 Steps to Becoming a Real Estate Agent (2019 Update)

If you’re thinking about becoming a ‘successful’ real estate agent, you will need to do your homework. You’ll have to take courses for licensing exams, meet and talk with professional real estate agents who will help you get your first few clients, and finally, sit for the exams to get licensed.
Besides these important steps, there are still other things you need to consider. Read to know some of the most overlooked aspects of becoming a successful real estate broker.
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How to Buy an Investment Rental Property: 9 Things You Should NOT Avoid (2019 Update)

Thinking about buying an investment rental property? Do not invest until you consider these things.
Rental properties are wonderful investment vehicle to earn passive income. But if you’re just starting out as a real estate investor, finding the ‘right’ investment rental property and knowing its true worth could be difficult at first. Simply consider these simple rules find a rental property that will make you wealth.
Consider these 9 crucial things before buying an investment rental property:
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