structured Sale

Retirement Exit Strategies

Real estate investors don't need to spend a lifetime deferring capital gains tax through the tax-deferred 1031 Exchange to simply throw in the towel at the end of their “active” investment life. Logically, investors should/will seek out an exit strategy that will for the most part keep their accumulated Capital/Equity intact.

Retirement Options

Unlike IRA's and 401k plans where there is little tax relief available for those RMDs (Required Minimum Distributions), real estate investors that have utilized the 1031 exchange to accumulate wealth have a variety of options available for a tailor-fitted retirement. Consider the following:

Swap until you drop - Simply stated, defer all gains until you pass away and your heirs will receive the inherited property with a stepped-up basis to current market value.

Installment Sale - A “seller carry back”, a “contract sale” or a “note and trust deed” sale are all terms that describe forms of seller financing or Installment Sales. In today’s world of Savings Accounts with virtually no interest paid, simply selling, paying the tax and placing funds in a Savings Account is not a very attractive option. The primary issues that come up are typically defaults of the buyer or early payoffs. Other items of note are the fact that taxes are owed in the year of closing for any Depreciation Recapture and Debt Relief even if there has not been a single principle payment. With all the above said, Installment Sales can offer Investors a nice cash flow in retirement.

Structured Sale - Think of a Structured Sale as simply an Institutionally Structured Installment Sale. A third-party assignment company assumes the obligation to pay over the term the Investor desires. The “Assignment Company” is typically a very large Insurance Company or equivalent and therefore there is very little chance of default.

Exchange into a passive investment (DST) - A Delaware Statutory Trust (DST) is like a Real Estate Investment Trust (REIT) that can be 1031 Exchanged. A DST is simply a separate legal entity created under the laws of Delaware to hold title to one or more income producing commercial properties. This can be any type of commercial property; apartments, retail space, office buildings, industrial parks, etc. And much like a REIT (Real Estate Investment Trust), an individual DST may hold title to multiple properties at one time. Exchanging into a DST makes great sense for Real Estate owners who no longer want the burden of active management.

Charitable Remainder Trust - A “CRT” is a tool that enables you to give to charities while reaping financial benefits. A CRT enables you to reduce or virtually eliminate capital gains tax on the sale of an asset funding the CRT, claim an income tax deduction, receive income and make a gift to the charity or charities of your choice.

Exchange until it makes tax sense - Sell realizing gain when there is a loss to offset or simply wait until your income is reduced through retirement. Historically it was possible to Exchange out of a high tax state and into a low or no tax State and later sell, though this option has been for the most part eliminated with States like California and Oregon reserving the right to claw back what was previously deferred if there is a taxable sale.

Tenancy in Common Investments (TIC) - Technically this is simply multiple owners in a common investment with deeded ownership. The TIC has been around for decades and today on the Institutional level has for the most part been replaced by the DST, but the ownership structure is still often used, even in the Institutional world. TIC offerings are typically present in “Value Add” properties and on the institutional level are completely passive like a DST.

Exchange into a retirement residence - Acquire your future Retirement Home via a 1031 Exchange and after seasoning the property as an investment you can convert the property to your primary residence without tax consequence.

Gifting - Gifting is often the objective of Exchangors as they get older. The Exchangor may have three children and would like to acquire a property for each child to have at a later date. Bearing in mind the federal gift limits, we often have clients gift portions of properties over a series of years. Although the “portion” strategy takes time and may require new deeds through the years the benefit can be huge with discounting of minority interest transfers of as much as 40% possible!

Structured Sale, Retirement Exit Strategies with Real Estate Investments

In summary, it is common for potential clients to state, “I’m going to have to pay the tax at some point, why not just pay today?” To that question we ask whether they have IRAs or 401k plans, if so, why since they will have to pay? The bottom line is tax deferral is one of the most effective tools you can utilize to grow wealth! Using the options mentioned above can defer, stretch out the payment of or even eliminate taxes!

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Our Knowledge & Expertise

There are a variety of options to consider when “exiting” active real estate investment, but the complexity requires someone (a team) with experience to put together the proper solution. Realty Yield is very knowledgeable about the intricacies of the various “Retirement (Exit) Strategies” and has personally seen the tangible benefit with many clients.

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Why Choose Us?

At Realty Yield, we want your investments to succeed. All investors need a plan, whether your goal is capital (equity) growth, maximum cash flow, realizing optimum tax benefits or any combination thereof.

The experts at Realty Yield will guide you through the complex and ever-changing world of real-estate investment with confidence. At Realty Yield, we know that lasting wealth comes from making the right decisions, at the right times. Knowing what to do in these moments is what sets Realty Yield apart.

By working with us, you’ll benefit no matter what your needs, whether you are looking to buy real estate property, sell real estate property, complete a 1031 exchange, secure a commercial loan, consult on investment real estate / portfolio performance improvement strategies, or executing a tax favorable exit strategy at retirement.

You are more than just a client, and we are more than just a brokerage firm. That’s why at Realty Yield, we make a personal commitment to you. We will create your own, unique, expertly crafted, Personal Real-Estate Investment Strategy. We give you the best results because we have the knowledge and experience to create your best plan of action. We will guide you through those vital decisions of what to do, how to do it, and when to do it.

We know we are only as successful as our clients. It is by providing unparalleled service that we keep our clients for life. Working side-by-side, year-in and year-out, we will proactively manage, assess, and strategize your financial investments through all stages of the investment life-cycle.

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Client Testimonials

All Testimonials
Mike Carlson has the ability to analyze and plan a strategy which takes advantage of market conditions, incorporates the best financing options and most importantly, maximizes the return on your equity. Mike is the real deal, honest, trustworthy and highly capable. I am happy to recommend him to anyone looking for assistance with their multi-family portfolio.
Gary M
2003 ~ Current
For anyone with real estate investments, Mike Carlson’s services are a necessity in order to achieve top results. Mike Carlson is very astute and knowledgeable in not only all aspects of real estate investment and wealth management but also in a wide scope business matters in general.
Lynn L
2005 ~ Current
Mike Carlson and his company are great - very professional, experienced and comfortable to work with. Mike’s analysis and technical abilities is top drawer! He knows how to evaluate portfolios and properties to determine the best investment strategy. Mike Carlson’s brokerage and negotiation skills are very polished and effective. Make no mistake about it; there is a distinct advantage in utilizing an experienced financing liaison. Carlson not only found good properties but also good financing. He made the entire deal work!
John B
2003 ~ Current
Mike has been what I was looking for in a commercial realtor. He has the unique ability to apply financial numbers to a project and not let the emotions of a property cloud the analysis. Working with Mike has always been about good communication and he does a great job. When you do finally find a property worth pursuing he is not pressuring you to make the offer and get the commission. It’s more about the long-term relationship. He reassured me that if he does a good job on this deal I will probably be back for more and sure enough I am in the hunt again.
Clinton L
2008 ~ Current
We were so pleased with Mike’s handling of the sale, purchase and financing of our real estate that we referenced Mike as a contact for our children and our attorney if we should die and the children were to be left with the apartments. We knew that Mike would be honorable and not take advantage of them in settling our real estate holdings.
L Family LLC
2004 ~ Current
I worked with Madison prior to her role at Realty Yield. Her drive and passion has always been evident in everything that she does. She truly is invested in her job and clients best interests. I would highly encourage anyone in need of guidance and expertise in investment real estate to consider Madison and the Realty Yield team.
Austin W
I was impressed with Cory’s ability to communicate and execute the sale of our duplex in pre-foreclosure with a very tight timeframe. He was respectful, professional and really made the transaction a pleasurable experience for my family.
February 2019
Cory Carlson was instrumental in the acquisition of our fourplex. His analysis skills, professionalism and productive communication while searching for our investment provided my wife and I confidence through the entire process. His connection with local lenders and understanding of the principles of finance prove Cory really is your one-stop investment broker and advisor.
Jason & Katie I
January 2019