Episode 81: Compound Your Acquisition Strength by Unlocking The Power of 1031 Exchange

Real Estate Investor MBA

What most people don’t know is that there is a real estate tool that allows you to move anywhere into any type of property, allowing you to expand your growth. In today’s episode, Dave Foster shares with us how we can compound our acquisition strength through the power of the 1031 exchange. And although the term is complex, Dave allows us to fully comprehend it by explaining clearly what a 1031 exchange is and how it works. He even shares some tips on how to start and when to use the 1031 exchange.

It has already been proven by numerous investors who learned and utilized the 1031 exchange that they can compound and scale up their capacity to walk through the peak of financial freedom and toward generational wealth. Sit with us now and find out how to use the 1031 exchange according to its right timeline so you don’t lose its benefits!

Remember, this is your MBA. Have a notepad handy, and get ready to take some notes!
Key Points from This Episode:

• Dave shares about himself and his goals.
• What is 1031 exchange?
• The origin of the 1031 exchange and how a man named Starker made 1031 available at the organic individual investor level.
• Dave talks about how the 1031 exchange works.
• The different types of investors and their timelines.
• What’s the timeline for a 1031 exchange?
• When does a property have to close?
• Is there a max number for a 1031 exchange?
• What’s the best time to start a 1031 exchange and sell your property?
• Dave’s story of how the 1031 exchange came to be.
• Dave shares a secret key strategy to generate profit that is tax-free.

Tweetables:

“In real estate, everybody says what? You make your money when you buy, and that's true. But the 1031, you keep your money when you sell and use the 1031.” – Dave Foster

“In all sorts of walks of life, real estate at its most organic level is all about growth into it.” – Dave Foster

“You just have to accept what the market is giving you and understand if I'm gonna sell at the top, it's probably unreasonable for me to think that I'm gonna buy at the bottom.” – Dave Foster

“Any property that is used for productive use in business, investment, or trade, as long as it is investment real estate, it qualifies for any other type of investment real estate and that's what makes 1031 so powerful.” – Dave Foster

“And another key that a lot of people don't know about is that another part of our strategy was that we would sell our primary residence. And every time we did that, after living there for two years, we got $500,000 of profit tax free.” – Dave Foster

Links Mentioned:

1031 Equity Exchange, LLC Website

About Dave Foster

Dave Foster, investment professional and qualified intermediary, or QI, understands that real estate is an investment in the future. He has 20 years of experience working in all phases of real estate investing - from large-scale development to single-family homes and vacation rentals. He has a keen eye for opportunity and a clear vision for reducing the impact of taxes.

A degreed accountant with a master’s in management, Dave has taught numerous certified continuing education courses on investment tax strategies. His particular focus on basic and advanced 1031 Exchanges has made him a popular guest speaker for local realtor associations, investment clubs, and podcasts. He teaches agents, investors and advisors alike the ins and outs of 1031 Exchanges and other tax and investment options.

Dave has built his reputation on being a driven, results-oriented QI who works relentlessly to maximize value for the real estate investors he works with. He is inspired by a genuine desire to help those around him succeed and continuously strives to create win-win situations.

The best investment decision Dave ever made has been to spend more time with his family. After just eight years as an investor, he was able to use a combination of 1031 exchanges and a section 121 exemption to generate enough tax-free proceeds for the cash purchase of a sailboat. He lived aboard and enjoyed the adventures of coastal sailing with his family for 10 years. Now he helps other investors pursue their dreams while he works on a land development project and his four sons finish their academic careers.