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There are 3 major Blunders that can turn an
investment into a nightmare. It is one’s duty to avoid these
at all costs when contemplating a 1031 exchange. Blunder
#1: Dealing with a non specialized company that does not
know what it really does. Check their history of TIC
offerings, ask for referrals from satisfied clients.
Ideally, they should only be doing this kind of
transactions. Are all their properties "top of the range"
commercial buildings or not ? Ask how they get listings and
what are their criteria to select them. Quality properties
are hard to find and sell out quickly. In real estate,
quality properties remain always desirable - low ones lag.
Blunder #2: Choosing an Accommodator that has not done
many, many of these transactions. This Qualified
Intermediary are here to make sure all the documents and
money transfers meet IRS guidelines. They are the one that
will set up your LLC. Using an Accomodator with whom one has
already a relationship, like a family attorney or estate
planning attorney is a Blunder because they may not qualify.
Do not forget, in case of bad paperwork, the IRS might send
a nice bill for taxes or penalties. As bad, the whole
transaction can fall through due to an incompetent or
inexperienced Accommodator.
Blunder #3: Negotiating too hard on the property
management company. These people are extremely important to
the performance of the investment. The investor heavily
depends on them to handle the day to day problems, carry the
proper insurance, keep the building without vacancies, in
nice condition and pay the property taxes on time.
By avoiding this 3 Common Blunders for a
1031 exchange
into a tenant in common property the investment will be a
profitable one. Ignore this piece of advice then beware of
the "alligator syndrome" (being eaten alive by hidden
costs).
Francois Marin
Real Estate Investment Specialist
The 1031 exchange is a fantastic opportunity to lower your
taxes and increase your equity. To get more information,
visit
http://www.howtofocuson.com
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