FREE Realtor C.E Class Lunch & Learn

1031 BASICS AND TRIPLE NET LEASES (60 Minutes)

1 What is a 1031 exchange (5 minutes)

IRS Definition

Modification after passage of the Tax Cuts and Jobs Act

2 What Taxes are we deferring (3 minutes)

Federal Capital Gains Tax

Health Care Tax

Net Investment Income Tax

Depreciation Recapture

State Tax

3 What is like-kind property (3 minutes)

Residential for commercial

Commercial for industrial

Single family for multi-family

Non-income vacant land for income producing

% Interest as a TIC/DST

4 What is excluded from like-kind property (3 minutes)

Primary Residence

Stocks, Bonds, Notes, Securities, Investments

Partnership Interests

5 Basic 1031 rules (5 minutes)

Equal or Greater

Reinvest

Replace the Value of the Debt

Receive No Money

6 Basic 1031 timeframes (5 minutes)

45 Days to Identify

180 Days to Close

7 Basic 1031 ID rules (4 minutes)

Three Property Rule

200% Rule

95% Rule

8 What is a triple-net lease property (5 minutes)

100% of the utilities, the real estate taxes, the insurance, the repairs and replacements are paid by the Tenant

Checking the lease to confirm actual responsibilities

Nationwide tenants.

Why do investors like triple-net lease properties – it’s like buying a bond

9 Due Diligence – triple net lease review (5 minutes)

Rent Schedule

Options to extend

Insurance and indemnity

Repair obligations

Guaranty

10 Due Diligence – Title Report and other Reports (2 minutes)

Title Report (Easement, Covenants, Conditions and Restrictions)

Phase I Environmental Report

Land Survey – ALTA

Zoning Report

Geotechnical Report

11 Right to Terminate (2 minutes)

Timing – usually 30 days

For any reason or no reason whatsoever

v. reasons related solely to the property and/or the lease

12 Financing Contingency (3 minutes)

Terms of the financing contingency

“all cash” – what does that really mean

13 Estoppel Certificate (3 minutes)

Form of Estoppel Certificate

Why is this so important

14 1031 contract language (2 minutes)

hat language should be included in the Contract

15 Q&A (10 minutes)

Host or Publisher Impact Abstract Title Insurance