Investment properties are a great way to prepare financially for your future.

We at The First King Team have many years of experience in taking our clients to the next level.  We have taken many families from the first stage of purchasing  their first home to becoming  investors in multiple units. Let us show you today how to “make the first step” OR “take the next step” …in attaining your investment goals. Our inhouse lender can help you attain your investment loans too!

 

The First King Team has experience in helping you find an investment property.  They work with 1031 exchange companies and   lenders who make investment loans to better help you in securing your financial future.

 

 

To receive more information about Investment properties, please click on the arrow to contact us.

 

Terms used in Investment property purchases and 1031 exchanges.

 

 

 

 Key Terms

1031 exchange Internal Revenue Code Section 1031 states that no gain or loss is recognized where property held for investment or productive use in a trade or business is exchanged solely for property of like-kind which is to be held for investment or productive use in a trade of business.

 

Boot is cash or other property added to an exchange in order to make the value of the exchanged properties of equal value

 

Deferred Exchange refers to an exchange of one property for another of "like kind". The capital gain tax owed on the sale of the property or item is deferred until sale of the exchange property.

 

Direct Deeding is a transaction where a relinquished property or a replacement property is deeded directly to a buyer (not to a qualified intermediary first).

 

Disqualified Person refers to a seller's relatives (determined under income tax regulations) or agents (including your attorney and your accountant).

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Escrow is an agreement between two or more parties, requiring that certain instruments, monies, or property be placed with a third party for safekeeping, pending the fulfillment of performance of a specified act or condition.

Exchange Period refers to the period during which you must acquire the replacement property, beginning on the day on which you transfer your relinquished property and ending at midnight on the 180th day after that.

Identification Period is the 45-day period during which you must identify replacement property that begins on the day escrow is closed on the relinquished property.

In-Cash refers to the point in time when an investor has closed escrow on the relinquished property and is in the 45-day identification period of the 1031 process. The money from the sale of the relinquished property is with a Qualified Intermediary, waiting to be reinvested into the replacement property.

Limited Partnership is a form of partnership in which there is one or more general partners, jointly and severally responsible as ordinary partners with liability, and one or more special partners, who are not liable for the debts of the partnership beyond the amount of cash they contribute/invest as capital.

Liquidity or liquid measures the ability to convert an asset to cash quickly.

Property or properties refers to legally owned real estate or possessions.

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Qualified Intermediary is the disinterested third party that holds the funds from the relinquished property and releases the funds for the replacement property, and ensures that all IRS requirements are met.

Real Estate Provider is a real estate company that focuses on acquisition of institutional-grade investment property for the purposes of offering Tenants In Common investment opportunities.

Relinquished Property refers to the property that is given up in the 1031 exchange.

Replacement Property refers to the like-kind property received in the 1031 exchange.

Preservation of Capital When the cost value of an investment is maintained or increased.

Section 1031 of the IRS code is the authorizing section of the IRS tax code that allows an investment property owner to defer capital gains and depreciation recapture taxes on a property sold.

Tax Basis or Basis The tax basis in a property is equal to cost minus accumulated depreciation. When exchanging, the beginning basis is equal to the tax basis in the relinquished property, increased by any new cash (including any increase in non-recourse debt) that is paid in the acquisition of the replacement property. Tax basis is depleted through annual depreciation and increased by capital expenditure.

Taxpayer is the person conducting the 1031 exchange.

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Tenancy In Common or TIC (also known as Co-Ownership of Real Estate (CORE)) is a way of sharing ownership of property among two or more persons in which each tenant holds an undivided interest in the entire property, either equally or in designated interests of differing sizes. TIC/CORE investors are on deed and considered separate owners of the real estate, sharing pro rata in the income, tax benefits, and appreciation of the property, with the properties employing professional asset and property management.

Trust is an arrangement whereby property is transferred to a third party (called the Trustee) by a grantor (called the Trustor). The trustee holds the property for the benefit of the Beneficiary.

The First King Team has experience in helping you find an investment property.  They work with 1031 exchange companies and also lenders who make investor loans to better help you secure your financial future.

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