My great grandparents were dirt poor. Over the course of their lives, they slowly accumulated real estate. The mass majority of their real estate portfolio were rental properties. Like many people of their generation, my grandparents never sold. If they did, I would imagine they would do a 1031 Exchange.
A 1031 Exchange allows an owner to sell his or her investment property so he/she can defer payment of capital gains, as long as the owner uses the proceeds to purchase a like-kind property. In addition to deferring capital gains, a 1031 Exchange allows the owner to leverage his or her proceeds into a new like-kind property.
The first thing to remember are for investment and business properties. In other words, you cannot do a 1031 Exchange on your primary residence. On a side note, you could sell your primary residence capital gains tax free. This is a completely different set of rules and laws than a 1031 Exchange.
Second, the property sold ("disposed") and the property purchased ("acquired") must be like-kind. Interestedly, like-kind does not mean the property you are selling has to have the same physical characteristics as the property you are purchasing. The definition is somewhat liberal. For example, you can sell an apartment building and buy an industrial warehouse. Or you can sell a condo and purchase a detached single-family home.
Lastly, doing a 1031 Exchange only defers your capital gains. There is no limit to how many 1031 Exchanges you can do. However, if you sell and if you do not do a 1031 Exchange, you will have to pay capital gain taxes.
I would not be surprised if you know someone who has faced this predicament. Let's say your parents purchased an investment property for $185,000; this was the median single-family home price on Oahu in 1985. Furthermore, let's assume the home is currently valued at $1,200,000. After owning the property for many years, your parents are thinking about selling. The million dollar question is: Do you pay the capital gain tax or do you do a 1031 Exchange? The decision is not easy because everyone's situation is different.
Most importantly, make sure you speak to a professional -- an attorney and or a CPA -- so you can get the proper guidance.
After you have an accepted offer, your Realtor will open escrow. Escrow is a neutral third party that transfer title (ownership) from the seller to the buyer.
Escrow is a very essential process of the selling process because they will:
Facilitate the real estate transaction.
Provide title insurance.
Ensure funds and the property will not change hands until all instructions for the transaction have been completed.
One of the flashlights I purchased was the Coast PM300. In all honestly, this has been one of the best all around work flashlights. This chameleon-like flashlight features a 180 degree rotation area light, a 360 degree rotation handle, a magnetic base, three light outputs, and beam and flood. Most importantly, the flashlight is very durable, as its intended use is for work.
Would it be great if the flashlight was rechargeable? Yes. However, I like how it uses AA batteries. This is important since my other flashlights use AA batteries too. I understand batteries can be expensive, but just go to Costco and buy it by bulk.
Although this flashlight can be helpful for your DIY projects, I would imagine it could be a great flashlight for hurricane/natural disaster prep kit.
Here is January's historic median sales price from 2019 to present. The data was pulled from the MLS. We are still waiting for the Honolulu Board of REALTORS to release last month's statistics. Will prices continue to increase?
I am planning to list a split-level single-family home in Waipio Gentry. The property is located in a cul-de-sac and it is located Waipio Shopping Center. With 2,375 living SF, this home boasts a spacious living room with vaulted ceilings and a convenient downstairs main bedroom with a private bathroom. Stay tuned for more information. Please let me know if you have any questions.
Stay safe and healthy.