What is Like-Kind Property?

Written by Rusty Tweed   Many of the people that come into my office have a huge misconception of what types of properties they can exchange into.   Most people I’m dealing with are selling multi-family rentals, for example, a four-plex or 6-unit apartment building.  They think that the IRS definition of “like-kind property” is another four-plex or 6-unit building.  The…

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Understanding Cap Rates

Written by Rusty Tweed   In the commercial real estate market, you’ll commonly hear the term, “cap rate.”   The full term is actually “Capitalization Rate” and is used to compare the value of a rental property on an “apples to apples” basis to other investment properties.  The term “cap rate” can only be used with regards to income-producing or rental…

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NNN Leases Explained

Written by Rusty Tweed   Many of you have heard the term “Triple Net Lease” but I’ve found a lot of people don’t fully understand what that means. First of all many of you have owned and managed your own rental properties, mostly apartments and rental homes. In that market, you have short term leases, higher turnover and you as…

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Is It Time for Your Next 1031 Exchange?

Written by Rusty Tweed   Savvy real estate investors have long used periodic 1031 exchanges to maintain leverage, increase income and equity, and eventually divest themselves of “tenants, toilets, and termites” by exchanging into professionally managed properties.  What Does 1031 Refer To? 1031 refers to Section 1031 of the U.S. Internal Revenue Code, which allows real estate owners to exchange…

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Interest Rates and Cap Rates

Written by Rusty Tweed   The overall interest rate environment definitely affects Cap Rates as well as the type of property, the credit standing of the tenant and the geographical area of your income property. In other articles, I’ve discussed most of these issues, but the one we haven’t looked at is how interest rates affect Cap Rates. First of…

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Cap Rates and Risk

Written by Rusty Tweed   Once an investor understands what a Cap Rate is and how to calculate it, he can then use it to compare properties and the risks involved. Generally, the higher the risk, the higher the return, in this case, the higher the Cap Rate. We see many investors “chasing income” and going for the highest cash…

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