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This episode is the first in our new ‘Lawfare’ series. We’ll be offering up shorter episodes focusing on the legal aspect of real estate investing.
Our first guest is attorney, Rob Gidel. Rob is a real estate attorney specializing in acquisitions, dispositions, development, financing and leasing. We’ve had Rob on the show once before and we’re glad to have him back!
This episode, Rob talks about net lease investments and using 1031 Exchange to purchase properties. He also shares tips for investors to avoid pitfalls.
1031 Exchanges & Single Tenant, Triple Net Lease Investments
A lot of multifamily and rental property investors love to use 1031 Exchanges to leverage new investments. If you’re not familiar, 1031 Exchanges allow for a deferral on capital gains tax from the sale of a property if the earnings are used to purchase another property.
However, some investors rush into buying a property on a 1031. This can get you into hot water if you don’t consider the purchase from an investment standpoint. If you purchase a property solely as a tax decision and not a financial decision, you may end up biting off more than you can chew. This is especially true for first-time investors of single tenant, net lease investments, or triple net leases.
Many investors who are new to net lease investments are enticed by the seeming ease of a long-term, single tenant. It may sound like an easy, hands-off investment strategy, but there are many nuances to triple net leases that make them complex.
Rushing blindly into an investment is never a good idea and net lease investments are no different. You do not want to miss this episode!