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Real Estate Investing & 
1031 Exchange

What are considered the best real estate investments? With the U.S. real estate market on the rise, investors are sifting through every available property type to discover which will help them profit. So which sectors and properties are the best moves for investors today?

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Residential

Residential Real Estate

There are numerous rental property types in residential real estate, though the most common is thought to be single-family homes. Other residential properties include duplexes, multifamily properties, and vacation homes. Residential real estate is ideal for many investors because it can be easier to turn profits consistently. Of course, there are many residential real estate investing strategies to deploy and different levels of competition across markets — what may be right for one investor may not be best for the next. For this reason, choosing the right exit strategy and market is key when it comes to residential real estate.

The most common exit strategies used in residential real estate include wholesaling, rehabbing, and buy and hold properties, which can be used to generate rental income. Investors should be careful to consider which strategies would work best in their market area by conducting a thorough market analysis.

When managed correctly, a residential real estate investment can yield attractive profits. This is because, in addition to earning steady cash flow, residential real estate benefits from a number of tax breaks.

Commercial

Commercial Real Estate

The best commercial properties to invest in include industrial, office, retail, hospitality, and multifamily projects. For investors with a strong focus on improving their local communities, commercial real estate investing can support that focus.

One reason commercial properties are considered one of the best types of real estate investments is the potential for higher cash flow. Investors who opt for commercial properties may find they represent higher income potential, longer leases, and lower vacancy rates than other forms of real estate. James Angel, Co-Founder of DYL states that “industrial real estate includes warehouses, storage units, car washes, and other special-purpose properties that produce revenue from clients that visit the facility. Industrial real estate investments frequently include major fee and service revenue streams, such as coin-operated vacuum cleaners at a car wash, which can help the owner maximize their return on investment”. Investors may also enjoy less competition in commercial real estate because purchasing these properties can be a larger undertaking than working with residential homes.

How a 1031 Works

For your 1031 Exchange, you need to follow these steps:

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  • Step 1: While contemplating the sale of an investment property, contact 1031 Pros.

  • Step 2: Enter into a contract and open escrow

  • Step 3: Identification Period

  • Step 4: Finalize Exchange

  • Step 5: Enjoy a fully tax deferred exchange

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Not sure how to do it on your own? We can help you there. Learn more about the steps and what goes into each one by clicking the link below.

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