We were so happy to help our investor clients with finding a replacement investment property in Venice. They made an excellent choice in purchasing a duplex that allowed them to continue to generate income after selling their investment property in Big Bear.
Do you know what a 1031 exchange is? If not, this is a great way to grow your investment portfolio through real estate without paying taxes upfront (taxes are deferred). Here is an example:
An investor purchases a property for $500,000. Five years later the home has appreciated by $200,000. If the investor sells this home and takes the proceeds, the amount would be subject to capital gains tax which is 15%. In order to defer paying taxes, the 1031 exchange can be used in order to purchase another property, rather than take those proceeds and pay all the taxes on it. Many investors will use the appreciation from their property through the 1031 exchange vehicle to 'trade up' and purchase a property in a better location for them, with more units and/or with a higher cash flow. This is another reason why real estate is an excellent wealth-building tool!
As for our clients who purchased this great property, they understood how to find a deal in a property that needed a little work, and also had sat on the market for many months! They avoided the bidding wars common in the last year and were able to use one side of their duplex as a short-term rental. Persistence and tenacity paid off as our team encountered difficult communication from the listing agent and limited ability to show the property due to tenant occupancy. They were able to purchase this home in a fantastic location in prime Venice right at the asking price, and below many of the online valuation estimates.
We are thrilled to have been able to help them, congratulations!
Southern California Homes Inc.