Department established in the Federal Tax Code, section 1031, allows real estate investors to sell property that has been held for investment purposes and defer capital gains and depreciation collect taxes if they acquire "like kind" exchange property of equal or greater value and reinvest all their actions. Since the mid-1990s, has seen many investors to profit reinvestment of their shares in real estate investment interest and rent restructuring - Joint (ICT). ICT players undivided property rather part in real estate investing is clear from the trust.
ICT, also known as co-ownership of real estate (CORE), which allows an investor to participate in the ownership of institutions row, an investment managed by real estate professionals. The investor can diversify shares between different characteristics, geographic markets and real estate companies and increase the likelihood of the value and integrity of the real estate investment. Designed TIC / CORE investments to provide preservation of capital, cash flow can be predictable and long-term institutional quality real estate assets and investments that benefit from greater economies of scale.
With features and benefits, TIC / CORE is an option increasingly popular for Exchange 1031 many real estate investors. However, it is a very complicated exchange transactions in 1031 and TIC / CORE, with all the tax and legal issues topping the list of potential pitfalls. It is therefore essential that investors should be aware of what to look for in an advisor. Required by financial advisors Securities Act to obtain a license for client consultation correctly on transactions TIC / CORE interest and other investments in the real estate sector. Financial advisors must be held for a Series 7 and Series 63 securities licenses to qualified consultants well rounded and knowledgeable in the investment process. It is essential that they have experience in the field of commercial real estate, in addition to understanding the investment objectives and personal issues customer's convenience.
But perhaps the most important element to look for in their intimate financial advisor ICT, reliable and deep relationships with major real estate companies. This function is critical to its ability to provide the best opportunities for their clients. There are about 80 real estate companies in the United States
States is already involved or consider participating in the ICT industry / CORE as a provider of real estate. As in any industry, which represents 80 companies with more or less business acumen and experience quality. To achieve the greatest potential for a customer, the financial advisor should have access to consistent top ten percent of these companies in order to provide client access to the best properties available. It is clear that a new financial advisor with little or no experience or knowledge of the industry do not have access to the best suppliers of real estate, and suppliers prefer to work with experienced consultants that specialize in this market segment is unique .
Investors should also be aware of how their financial advisor stacks up, looking for a date of the transaction successfully. A long and proven indicates that the financial advisor is an experienced professional. Investor wants such an advisor in the area and they ask all the right questions, make recommendations in a timely and appropriate, understand the nuances of successful operations TIC / CORE and provide answers to all questions and all taxes and legal.
When considering a 1031 exchange or TIC investment / CORE investors should ask the following questions of financial advisor:
* What percentage of your company's Exchange 1031 and / or TIC / CORE related?
* How do you consult investors that invested in TIC / CORE structured properties this year? Last year?
* How long exchanges and ICT 1031 / CORE has been your investment recommendations?
* Do you have the appropriate licenses to complete this operation (Series 7, Series 63 securities licenses)?
* With providers of real estate that you work closely?
As customer demand continues to drive this segment of the real estate market, and focus on quality - quality of advice and quality goods and quality transactions - will be increasingly important. As part of quality assurance is to ensure that financial advisors representing the client to make appropriate recommendations to the client based on the client's interest, and not on the basis of a "bias". A final issue that must be addressed is that it is not uncommon for compensation "referral" to pay between related parties. This practice is illegal and a complete violation of ethics. Therefore, if any compensation changes hands - disclosed or undisclosed - between financial advisors and qualified mediators and real estate companies or other unauthorized persons from exchange agreement, has signed a crime.
In short, investors should take the time to get to know a trusted advisor who can not provide acceptable answers to the questions above, but will also have the relationships necessary to guide their clients in the appropriate investment. It is important to remember, must be approved companies or individuals involved in the recommendation, offer or sale of ICT 1031 / CORE investment dealer and broker with the SEC and NASD and state securities regulators securities in each state where a company or individual who works and resides client. Any "unauthorized" company or individual involved in the recommendation, offer or sale of these investments, in direct violation of federal securities laws and state.
The condominium is the fastest growing option for 1031 exchange investors seeking suitable replacement property. The structured properly, can generate these investments as new opportunities for the list of real estate agents while complying with all IRS "like-kind" investment property requirements and the SEC and NASD securities regulations. Advantages condominium buildings institutional quality, clear and convincing. Exploring condominiums and smart investors need to look for industry experts to guide them through the process of replacing the property. Is actually a savvy investor who knows the long-term goals of its efforts to make the appropriate guide rail, and spend investment opportunities TIC / CORE reality.
(C) 2005, 1031 Exchange Options. Print rights granted so long as article reprinted intact and all online live links. This article does not constitute an offer to sell or an offer to buy real estate or securities. There are risks inherent in real estate. You must be an accredited investor. Securities offered through Sigma Financial, member NASD / SIPC.
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