​Questions You Missed
3.
Taxwise, three possible debt-to-value scenarios exist for the lender:
the debt owed exceeds the property’s value, called debt-over-value;
the property’s value exceeds the debt owed, called value-over-debt; or
the property’s value equals the debt, called debt-equals-value.
10.
The common features found in the acquisition of real estate by either a cash purchase or an exchange of equities include a due diligence investigation by the buyer acquiring title concerning his ownership, use and operation of the property.
25.
An investor in a delayed §1031 reinvestment must, in writing, identify the replacement property by midnight on the 45th day after the date the sales escrow closed on the property sold.
27.
If the replacement property is located before the sales escrow is ready to close, a §1031 trustee will not be needed if the escrow the owner opened for the purchase of the replacement property is ready to receive funds, a transaction called a concurrent closing.
28.
Exchange corporations claiming to be facilitators often present themselves as “§1031 specialists” with expert analysis and creative handling.
However, these corporations are separate from the licensed activity of the escrow company that might recommend their use. Facilitator corporations do not fall under the governmental administrative requirements imposed on escrow companies, banks, thrifts, title companies or licensees. Licensees who operate an affiliated “facilitator business” do not act in the capacity of a licensed real estate or escrow agent.
29.
Two documents are prepared and handed to the buyer to sign and return in order to complete the buyer’s promise for an accommodation under the cooperation provision, including a declaration of trust by which the buyer establishes a trust and appoints the trustee selected by the investor to hold the net sales proceeds until further instructed by the investor to disburse the money to the purchase escrow handling the investor’s acquisition of a replacement property.
30.
The parent-child exclusion only applies to transfers between parents and children.
The definition of a “child” includes a parent’s son-in-law or daughter-in-law.
41.
Local property tax rates are limited to 1% of the real estate’s assessed value.