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1031 Alternative-Delaware Statutory Trust

2/25/2019

Section 1031 is an Internal Code provision that defers tax on qualifying exchanges of like-kind real estate. From the time of closing of the relinquished property, the investor has 45 days to identify a potential replacement property and 180 from closing to acquire the replacement property.

Your Estate Attorneys and Estate Planners will be very interested in what I explain below. Please pass this knowledge on to them and I will be happy to set up a meeting to answer any and all questions.

Not many people or professionals are aware of the passive solution to the 1031 Exchange:
The Delaware Statutory Trust (DST).

Basically to qualify you need $1M Net Worth excluding primary residence, $200K Single Income and $300K with spouse. The property sold qualifies to satisfy Net Worth.

This is great for someone who wants to reduce their real estate portfolio and avoid taxes or cannot find an appropriate 1031 replacement property. You will get a check every month. You or your clients may not want to deal with the property management aspect of their real estate anymore.

Also, if there are disputes, there are shares which can be split up amongst members of a family and they can do whatever they want with their shares. I have a situation like that now.

A DST can offer many other benefits;

1. Access to institutional quality real estate.
2. Professional asset and property management.
3. Passive ownership
4. Non-recourse institutional financing
5. Lower minimum investments
6. Portfolio diversification
7. The ability to close quickly.

I can handle both the front and back ends of your real estate transaction. We do business with experienced firms which best match your goals.

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Selling Your Home in 2018

12/21/2017

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YOU ARE IMPORTANT TO ME, WHY?
Selling a home is an important and potentially stressful event if not handled professionally and with clear communication. How should you price your home to maximize value? How long will it take to sell your home and close escrow? Who will give you updates and feedback? What can you expect in escrow? To answer these questions, here is what I do:

PRICING – The key to determining the right price is to know what your competition is and what potential buyers are looking at the exact moment you put your home up for sale. I will have seen your competition and because I track the buyers in the marketplace, I will advise you as to whether the price can be pushed a bit or not. This information changes quickly. Because we both want the best price possible, we will strategize what this is for you.

STAGING FOR SHOWINGS – The better a home shows, the quicker it sells against the competition. When we meet to list your home, we will go through it together to determine what we should do before showings begin. This may include de-clutter, re-arranging furniture or perhaps even putting things in storage.

SHOWINGS – Showings are done with me present at every showing to make sure no question or concern goes unanswered from a potential buyer. Ever!! Most showing agents are showing multiple properties and can't get the facts on all of them. That's where I come in. I sell your home, I don't just list your home!!

OFFERS – When an offer is written, I will determine four things before reviewing it with you. The motivation of the buyer is the most important – how serious and committed are they about buying your home? Next are the financial qualifications, time frames and contingencies and finally price. All of this will be vetted out before we respond to an offer. We will also solicit back up offers where possible and appropriate.

ESCROW – Since getting into escrow is the whole point of listing your home, the process demands a full-time professional whose only job is to make sure you know what is happening at all times. Surprises are the enemy of a happy seller and timelines must be met on a daily basis. Having Me and my Team manage the escrow, gives us the best chance to make sure you are always feeling informed and never surprised.

A great Real Estate agent must do many things for you. I ensure there is a system in place and that I oversee ALL aspects of the process from start to finish. I am involved with EVERYTHING. I have a team, but they mostly work behind the scenes so your direct contact on everything is always me!

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Las Vegas Route 91 Concert

10/12/2017

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All of you I am sure have heard by now of the tragedy which occurred Sunday night in Las Vegas during the Jason Aldean set.
I was there.

Lucky for me, I was making my way out after Aldean's fourth song. He was talking about how we were going to party; that he doesn't talk much but prefers to sing. Everybody cheered.

A few minutes before, I was in front of the stage listening to Aldean like everyone else with a beer in my hand having a great time.

Prior to Aldean's set, Big and Rich led the crowd in singing God Bless America. They also brought a few veterans to the stage so we could give them and all veterans past, present, and future their proper due.

Little did we know that just a short time later, a lunatic on the 32nd floor of the Mandelay Bay hotel was about to open fire on the crowd.

As I was walking out of the venue, I looked at my watch and noticed it was a few minutes past 10p. I was a little tired and was ready to go. My wife was not feeling well and left the set before. The young lady at the exit said "thank you for coming and I said, thank you."

I crossed the street on Las Vegas Blvd on my way to the MGM Grand. A few moments later I heard about 30 shots, a pause, then at least another 60 shots in succession. The gentleman next to me said, "those aren't fireworks, sounds like an AK."

We started walking faster until we heard the panic and running behind us. We ran just to keep from getting stampeded. Terror, hysterics, crying, you name the emotion and I heard it.

Within it seemed seconds, the police were speeding down the other direction towards the concert. I had never seen or felt anything like this before. People were hysterical running down the street and through our hotel lobby to get to the elevator. Once in the elevator, a few of us were trying to calm everyone down.

Obviously, some were separated from their friends and loved ones and were urgently on their cell phones trying to make contact. Once I got back to the hotel room we did the same.

Miraculously, the friends I was standing with at the beginning of Aldean's set moments earlier were not hit. They had knocked down a 10 foot fence, hid in an abandoned building until they were able to make it back to the hotel.

Let me just say, I don't know what to believe, but I lost my mother just about two months ago at 89 years old. As I was running down Las Vegas Blvd, I thought of her. Was it my time? Did she have anything to do with me leaving when I did? Not sure but my mother was a believer.

By now you know, at least 59 are dead with hundreds injured. Fortunately, our friends are safe. I didn't hear the ricosheting bullets or see the death many saw. I am thankful for that but what I did hear and see has changed me forever.

I can't help but think what may have happened if I stayed 10 minutes longer.

My thoughts and prayers are with those whose lives were changed forever.

For those who feel inclined, here is the
Go Fund Me link to help those victims with hospital and funeral expenses:

https://www.gofundme.com/dr2ks2-las-vegas-victims-fund

If I may also suggest the link to Jimmy Kimmel's monologue from Monday night to at least begin a conversation:

https://www.youtube.com/watch?v=ruYeBXudsds

Friends of ours who witnessed this massacre are not sure they can ever go to a Rams' game again.

We need to do everything we can to keep this from happening again....and again.

Thank you for taking the time to read this.
Writing these thoughts was therapy for me.

Feel free to share.

GOD BLESS AMERICA

To find your home value go to www.losangelesventurahomevaluation.com.

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1031 Exchanges and Tax Reform

7/17/2017

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I attended a talk recently and found this very important for you to know. Please take a few moments to read.

A 1031 Exchange allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes.

In an effort to reduce U.S. corporate taxes from the current 35% to a 25% rate, Congress is looking at what are called "revenue offsets" (ie. eliminating an existing tax benefit) to "pay for" tax reform without directly increasing tax rates in other areas of the code. Due to the Joint Committee on Taxation's (JCT) increased tax expenditure figures for Section 1031 exchanges (loss of $98.6 billion over next 10 years) the 1031 exchange became a part of the tax reform discussion. Consequently, the 1031 like-kind exchange is being threatened.

Making the case for keeping 1031s....
Ernst and Young macroeconomic study, The Economic Impact of Repealing Like-Kind Exchange Rules, reveals the repeal of Section 1031 results in less federal revenue, would shrink the economy, discourage investment and is at cross-purposes with tax reform. Study shows an estimated reduction in the overall GDP of $61-$131 billion over 10 years if 1031s were eliminated. Repeal would also subject many businesses to highter tax burdens, result in longer holding periods, greater reliance on debt financing and less efficient deployment of capital.

The House Blueprint also proposes eliminating the deduction of business interest expenses and also eliminates deducting state/local property taxes. This proposal would likely hurt real estate because many investment properties will not cash flow without being able to deduct mortgage interest and taxes.

TAX RATES:

Trump and the House GOP Blueprint both propose simplifying from today's 7 brackets to 3 brackets:12%, 25%, and 33%.

President Trump proposes a 15% corporate tax rate and a maximum 20% capital gain tax rate.

The GOP House Blueprint proposes:
a)20% corporate tax rate

b) 50% exclusion on capital gains at three new tax rates of 6%, 12.5%, and 16.5% (1/2 of the three new proposed ordinary income rates).
Don't forget: The state will still be collecting its taxes from 9.3%-13.3%.

A final fact you should know if you are investing in property. Current inventory levels are low. Therefore, you may be challenged in meeting the 45 day ID period. A good idea may be to find the replacement property first.

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1031 Alternative-Delaware Statutory Trust

Selling Your Home in 2018

Las Vegas Route 91 Concert

1031 Exchanges and Tax Reform

Gregg Franklin

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