#real-estate

$100 Million Fidelity Bond

Protects the taxpayer in the unlikely event of a company failure; the bond is there to satisfy the financial obligations of the company.

$50 Million Written Performance Guaranty

Ensures the taxpayer exchange funds are returned in the amount of deposit.

$30 Million Errors & Omissions Insurance

Safeguards against employee negligence resulting in a loss to the taxpayer

IPX1031’s parent company, Fidelity National Financial (FNF) is the world’s largest provider of title insurance and real estate related services.

A 1031 exchange lets investors defer capital gains tax on the sale of one investment property by reinvesting the proceeds into a like-kind property.

The replacement property must be identified within 45 days, and the exchange must be completed within 180 days.

The 45-day and 180-day time periods for a 1031 exchange run concurrently, starting when the relinquished property is transferred.

One of the most significant benefits of 1031 exchanges is their potential for estate planning. When a property owner dies, the owner’s heirs inherit the property at its stepped-up market value, and do not have to pay the deferred capital gains tax. A 1031 exchange can defer tax during the property owner's life; if the replacement property is held until death, Section 1014 may eliminate the built-in gain for heirs.1827

Depreciation enables real estate investors to pay lower taxes by deducting the costs of wear and tear on a property over its useful life.

When that property is eventually sold, the IRS will want to recapture some of those deductions and factor them into the total taxable income. A 1031 exchange can help to delay that event by essentially rolling over the cost basis from the old property to the new one that is replacing it. In many 1031 exchanges, the carryover basis generally continues under the old property's depreciation schedule, subject to IRS rules and exceptions.

Our tiered fee schedule rewards long-term commitment and exit fees decrease over time, reaching 0% after five years.

California’s “Trump Tax Loophole” is a billionaire-friendly tax break that lets the wealthiest commercial property owners avoid paying taxes based on what their properties are actually worth. It traces back to Proposition 13, which was promoted as a way to protect homeowners from being taxed out of their homes when values rise. This law has been exploited to generate massive corporate tax giveaways, including an estimated $200 million windfall at Trump’s 555 California Street building in San Francisco.1 By including commercial and industrial property, the law created a system that billionaire and corporate landowners exploit to lock in artificially low tax bills for decades—even while their buildings skyrocket in value and generate enormous profits.

While on-time mortgage payments are known to increase one’s credit score, many renters don’t have any history of credit. Esusu reports on time rent payments to credit bureaus so renters can build their scores. Over 50 million Americans lack a credit history with the three major credit bureaus: Experian, Equifax and TransUnion.

HENRY GRABAR: Parking is the largest single land use in many American cities. If we were designing society from scratch, would we have placed car storage on the pedestal that it now occupies?

You know, one of the things that immediately jumped off the page for me when I was reading your book is the fact that, by square footage, there is more housing for each car in this country than there is housing for each person. And on its face, I have to say that statement feels incredibly problematic, but is it?

GRABAR: I don't think it's that surprising when you start to think about it. I mean, there are more - we build more three-car garages in this country than we build one-bedroom apartments. Almost every jurisdiction in this country requires parking as a part of every single building type, whether you're building a school, an apartment building or an office or a restaurant, the law requires a certain number of parking spaces. So we have parking minimums in every jurisdiction in this country, whereas for housing, we often have maximums. We say, on this plot, you can only put one unit of housing. You can only put two units of housing. So the fact that we've ended up with a surplus of parking and a shortage of housing is no surprise. In fact, it's by design.

For a $400,000 mortgage at a 6.5 percent interest rate, the monthly payment on a 50-year mortgage is $2,254.87 compared to $2,528.27 for a 30-year mortgage. And yet, this modest decrease in monthly payments will be offset by a dramatic increase in interest payments: from $510,177.95 on a 30-year fixed-rate mortgage to a staggering $952,920.53 on a 50-year mortgage.

The reality is that even 30 year mortgages don’t make sense and never did. A 30 year fixed rate mortgage would never be offered by private markets without government incentives. They nearly masked the fact that Americans couldn’t save and couldn’t afford housing. They went onto exacerbate the problem by making Americans primary if not so retirement investment in their home. This incentivize homeowners to value scarcity in housing as lower supply will create scarcity and drive up the price of their “investment”, but in this case, the investment is housing for others.

The 50 year mortgage is a scam. I’m just not sure if the administration actually knows that or not.

By the numbers: Consider someone taking out a $500,000 home loan. The current rate on a 30-year mortgage is 6.22%, per Freddie Mac. For these calculations, let's assume that a 50-year loan's interest rate exceeds the 30-year by the same margin that the 30-year rate exceeds a 15-year rate.

That translates to a 6.94% rate on the 50-year loan — which would then have a monthly payment of $2,985, only $83 less than the 30-year mortgage. Zoom in: In the early decades of the loan's repayment, the 50-year borrower's payments would almost entirely go to interest, paying down the debt much more slowly.

After five years, for example, the 30-year borrower would have paid off $33,481 of the loan balance, versus $6,707 for the 50-year borrower. After three decades, when the 30-year mortgage is fully paid off, the 50-year borrower would still owe about $387,000.

Interesting