Commercial Property Investment

Q and A: What is a 1031 Candidate? Questions Answered by Brain Fielding

Posted by on Aug 26, 2014 in Brian Fielding, Commercial Property Investment, Question and Answer | Comments Off on Q and A: What is a 1031 Candidate? Questions Answered by Brain Fielding

Dear Mr. F.

As part of our effort to learn more about investing in real estate, we have come across a number of offerings where the broker suggests that they are great 1031 candidates. What is a “1031”?

Foster Family in Phoenix Arizona

Dear Foster Family,

The term 1031 comes from the IRS regulations and is a vehicle that allows individuals [and entities] to sell off a property that has been largely depreciated and has appreciated in value without having to, then, pay “recapture” or capital gains taxes. One of the things we love about investing in commercial property is our ability to write off [depreciate] the property and various improvements over their natural life [excluding the value of the land since land does not “depreciate” – or lose value over time due to wear and tear]. Depending upon how aggressive the investor wishes to be in segregating various components of an acquired property, the investor can deduct a portion of the assets values each year that he owns it. With that wonderful benefit comes a day of reckoning when the investor looks to sell that asset and faces “recapture” as well as appreciation of value. With a 1031 exchange, the investor can transfer his basis in that asset to a like investment and defer the tax consequences.

It sounds like you are not yet ready to concern yourselves with such issues, but hopefully one day you will and the 1031 provision might be an important strategy for you to consider. When that day does come, please insure that you get competent advice from an attorney familiar with 1031 exchanges and from a “qualified intermediary” who must be employed to insure full compliance with the regulations.

Good luck with your investing … thanks for writing us.

Brian Fielding

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Brian Fielding Discusses Financing Options for Commercial Properties

Posted by on Aug 1, 2014 in Brian Fielding, Commercial Property Investment, Property Investment Advisor | Comments Off on Brian Fielding Discusses Financing Options for Commercial Properties

The Wall Street Journal had a most interesting article recently about financing on commercial properties that should be of interest to all persons considering investing in that industry.

Previously, lenders were reluctant to provide financing on smaller deals, those that would most appeal to the new investor. However as the WSJ reports, lenders are revisiting their previous reluctance and are now actively seeking to lend on properties that are in the reach of many investors and small partnerships shares property investment advisor Brian Fielding.

As the reader will note, non-traditional lenders as well as regulated banks have found that there is a need and an opportunity in lending for small acquisitions. Indeed, giants such as Wells Fargo have implemented programs to lend as little as one million dollars for relatively small acquisitions.

Investment advisor, Brian Fielding commented that “The change in policy should be exciting to anyone considering pursuing commercial properties. Even nouveau investors are well positioned to borrow on assets that are leased to creditworthy tenants.”

In fact, many of the market setters are willing to consider limiting the recourse that they require, recognizing that the inherent value of the real estate and the quality of the lease provides a great deal of security in many deals. For more information about these types of investments and many others, contact Brian Fielding today.

 

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