1031 Exchange & Real Estate Investing

Owning income-producing investments, especially real estate, allows investors to hedge against inflation and concurrently receive cash flow from the collection of rent and/or lease payments. Investing in real estate can provide non-correlation to market activity within a well diversified portfolio. Our expertise in real estate investing offers solutions in four categories.

1. Non-traded Real Estate Investment Trusts (REITS*) – The non-traded real estate investment trust provides access to individual investors and for the institutional investor in direct participation programs (income and net worth requirements may apply). REITS offer the risk/reward ratio of investing in real estate without the management responsibilities of owning real estate outright in a non-correlated asset to the publicly-traded markets. Since 2003, we have teamed with the leaders in this industry, thus providing an extra level of due diligence in selecting non-traded REITS, which we believe demonstrate best-in-class practices.

2. 1031 Exchanges – When an accredited investor sells an investment property (commercial, industrial, office buildings, apartments, rental houses, farm land, etc.) the Internal Revenue Code 1031 provides the rules for full re-investment of the sale proceeds with complete tax-deferral. A little known fact is that Delaware Statutory Trusts (DST) qualify as tax-sheltered 1031 replacements. Our expertise in 1031 Exchanges and DSTs gives clients the ability to realize tax-deferred capital gains through passive real estate re-investment, often providing an increase in income and portfolio quality. DSTs allow an investor to own shares in institutional-quality real estate without management responsibilities.

3. IRA-owned real estate through self-directed investing – Clients who desire to remain landlords can own local properties within an IRA. Yes. IRAs can take title to investment properties and can even qualify for mortgage loans to purchase leveraged real estate within this tax-sheltered structure. Our knowledge of the rules and best-practices of IRA-owned real estate helps clients  maximize their landlord opportunities.

4. Due to our focus on the non-traded REIT and DST marketplace, we are very familiar with many of the sponsor companies and industry-leading managers in this segment of the publicly-traded markets. We leverage this expertise to advise our clients in publicly-traded equity REIT and debt REIT positions within liquid portfolios. These liquid investments often pay significant cash flows, while possessing strong correlation to broader equity markets.

If you’re a real estate investor or you have a curiosity about real estate investing, we can help.

1031 Brochure DST Brochure

This information is for educational purposes only. Individual cases should be reviewed by tax and legal counsel. All investments have risks. Some investments may be suitable for Accredited Investors* only. This is neither an offer to sell nor a solicitation to buy any securities. Such an offer must be accompanied by a private placement memorandum.

*An accredited investor is an investor with a net worth in excess of $1 million or any individual
income of $200,000 or a joint income of $300,000 in each of the last two years.

*Real Estate Investment Trusts are a longer-term illiquid investment and may not be suitable for all investors. Vacancies can negatively impact income and capital gains potential. Investments in real estate may be affected by adverse economic conditions and regulatory changes. Distributions are not guaranteed. Due to the risks involved in the ownership of real estate, there is no guarantee of any return on your investment, and you may lose all or a portion of your investment. This is neither an offer nor a solicitation to purchase any products, which may be done only with a current prospectus. Investors should consider their investment objectives and risks, along with the product’s charges and expenses before investing. Please read the prospectus carefully before investing.

Conservation Easement

This introduction is an excerpt from the Conservation Easement Overview White Paper provided by Sirote & Permutt, PC.
“To encourage the preservation (in perpetuity) of land with significant conservation values, Congress has provided substantial tax benefits to landowners donating qualifying conservation easements. The primary incentive to this conservation is an income tax deduction under Section 170(a) and (h) of the Internal Revenue Code.
In addition, high income earners can also experience similar income tax deductions through participation in Partnership structures or syndicated conservation easement” options. Partnership structures that allow investors to become members of a land-owning partnership that is considering the development or conservation of such land can allow, under the right circumstances, multiple landowners to benefit from the tax benefits resulting from a conservation easement donation if that approach is chosen. This may result in the permanent preservation of land that might not otherwise be protected due to the significant profit potential to be extracted from the highest and best use of the property for development purposes. Ultimately, the decision of whether to develop or conserve the property, or to commit the property to some other use, will be made by the landowner(s) or their designee, regardless of how the property is held or owned.Thus, the tax incentive for onservation easements found in Section 170(h) will achieve its purpose, even in a partnership setting, by encouraging the donation of a conservation easement on property and by protecting the conservation values Congress wants to preserve in perpetuity for future generations.”


Click to download the Conservation Easement Resource Guide Wooldridge Levitt Rhodes & Vinson