1031 Exchange into a Syndication? with Dave Foster

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Dave Foster  0:00  

Perhaps a better distinction is the difference between a Tenant In Common common project and a DST primarily is that the DST can accept the limited numbers of investors.

Taylor   0:11  

This is passive wealth strategies for busy professionals and today our guest is Dave foster from the exchange resource group. Today you're going to learn all about the 1031 exchange and specifically how it can be applied to real estate syndication investing. We've talked about syndication on the show, before I invest in syndications. I do syndications. 

this topic comes up very frequently and online forums like bigger pockets are all the Facebook groups that are out there about real estate investing right now. we're going to get into the strategy, the mechanics that you can use to apply the 1031 tax deferred exchange to syndication investing, and then we'll talk about the advantages of the 1031 exchange in general and how it can be used over time to Seriously, grow your portfolio. 

if you're a syndication investor or considering investing in syndications, and you want to learn about the 1031 exchange, this is the interview to listen to stay tuned to the end. Dave has an educational platform he's going to tell you all about. Again, this is a very fun interview to record.

You're going to hear that we did it on a Saturday, a great time to talk about earning money. here we go with Dave foster from the exchange resource group. Dave, thanks for joining us today. Taylor. It's great to be here. Thanks for having me. Happy to have you. Happy to be talking for those listening. We are recording on a Saturday. Dave is a warrior.

Dave Foster  1:46  

Yeah  looking at it as at a cloudless sky in Florida. The beach is 200 yards to my left. let's cut this short. All right,

Taylor   1:56  

man, we're going to get all the great information here and We're, we're pushing into winter here as we're recording, so it's not going to be nice out for much longer. 

Dave Foster  2:04  

that was that was a horrible reminder to you guys,

Taylor   2:06  

wasn't it? Yeah, right. Right. Alright, so the 1031 exchange. We're going to talk all about that today. Dave, can you tell us about your story before we get into  topic at

Dave Foster  2:18  

1031? Yeah, you bet I was  as we were sharing earlier, I love your focus on how to use real estate investing, as a site to create generational passive wealth that's going to stay with you, but allow you to live life. the two great premiums, commodities in life hard time and money, right? Absolutely. It seems like we've got time but no money. We've got money, but no time. How can we use real estate? to do that? 

That's always been in my mind. I gotta tell you about 23 years ago, there was an epiphany moment where three things came together. In a really weird events, it was a birth. It was a court case. it was a real estate deal. they all have nothing to do with with any either the others. My wife and I had been dicks. We know the terminology, double income, no kids, it was pretty like Frank. all of a sudden, this little bundle arrived. I was smitten. 

all I could think of was, how can I find more time to spend with this little guy? And at that same moment as we were transitioning into Parenthood, done a real estate deal, a flip one of my first flips and sold it and thought I did really well. then my account came to me at tax time. I said, Well, that's not nearly as well as I thought it should be. Yeah, x is just killed me have a deal. at that exact same moment, some friends of mine and alerted me to a court case, yes, we were geeks to talk about stuff like that case and it just come through the system for 20 years. That was going to change the face of real estate investing. 

it was around a topic called the 1031 exchange. The 1031 exchange is named after section 1031 of the IRS code that's been around since 1921. But it was not user friendly. Until this huge court case was settled in 1997. now all of a sudden investors could use it to sell real estate, park the money with what's called the Qualified Intermediary. Go shopping and buy new investment real estate and not have to pay tax on the Prophet. 

The light clicked on it went Holy cow, if I would have done that. I'd have 30,000 more dollars in my pocket today. Right rather than paying that tax, I'd be buying stuffed animals and lollipops for my son, life would be awesome. But that changed all the fabric of my life because at that moment, I realized, this is truly for me the ticket to what i what i think it was Albert Einstein, called the eighth wonder of the world, harnessing the power of compound interest. 

Because compound interest happens, whether you do anything or not, as long as you leave your system or your money in place, and that's exactly what the 1031 exchange was allowing me to do was to put the tax money deferred at work for me indefinitely so that I could then go and focus on other things, chiefly enjoying being a dad raising a family and doing more real estate investing. that was the conference I was sold and then along the way, we decided to start a company because we saw apart from the west For us, and started doing the 1031 exchanges for others,

Taylor   6:04  

and I've never looked back. Fantastic. That's quite the story. it's a very impactful lesson. I can see because a lot of people don't know before they get into real estate investing, that flipping specifically is very highly taxes, taxes, regular income. If you're not careful about I'm sure there's strategies to reduce the tax bill. 

But if you're just going out and flipping a house in your spare time, you're going to get whacked by the tax bill at the end when you know that next year. let's talk about the 1031 exchange as a tool and something we discussed before we started recording. I feel like I get asked, or I see this question pops up on a weekly basis. Can I sell my property and 1031 the proceeds into a syndication Can I invest in syndication with a 1031 exchange

Dave Foster  6:57  

that falls really neatly into the classification of What type of real estate qualifies for a 1031 exchange? Now, we already talked about the idea that flipping property does not because you already intent when you flip a property is primarily to resell it at that type of realistic does not qualify for 1031 1031 real estate is any kind of investment, real estate that you purchased with the intent of holding for productive investment use. 

if you buy a property, fix it and flip it, your intent was to resell. If you buy a property, fix it, put a record in and hold it for a while. Your attempt was to hold for productive use, it now qualifies. there's a little bit of an aspect of the length of time, but it's more about what your intent was. it can be any kind of investment real estate. strategy wise, before I talk about the strategy wise, my clients and I have used the 1031 exchange, to go from perhaps started with a single family home to then 1031 and into a small multifamily into a commercial property into raw land for development into any class of real estate that you want, as long as your intent is to hold it for productive views, but it has to be actual real estate. 

that's where we get into the syndication format. Because in most cases, a syndication is going to be set up as either an LLP Limited Partnership, or a limited liability company. for someone who is going to sell a piece of property and want to 1031 they have to take title to actual real estate. so many of these syndications these days are set up So that you're not taking title to actual real estate, you're taking title to a membership interest in a company that owns a piece of real estate. it does work, you can't you can't tip everyone into it. 

Now, what we're starting to see what you are we're discussing, how we can create for you is the idea of creating a syndication that allows tenancy in common. that investor could sell their property, do a 1031 exchange, and purchase a tenant ID common interest in real estate that you're syndicating. your LLC or LP could own 95% of it. The client comes in and owns 5% of it. they do either have a management agreement in place on how it's going to be handled moving forward, or at the end of the 1031 exchange. 

They then contribute their Tenant In Common competent trust you To a membership interest in the LLC, in exchange for the membership interest, much like what we would call this, I think it's a 721 exchange and upgrade, you can't exchange into a REIT, although What a beautiful passive entity right? But you can't do that because you're not buying actual real estate. You're buying a membership interest in a company that owns a bunch of real estate. to read may have a piece of property that they would like to you could do here 1031 exchange, so your old property, buy that property, you defer all taxes and all depreciation recapture. then you exchange that property with the rate for a membership interest in reading.

Taylor   10:50  

And at the end of it, you haven't paid tax you don't want to read same exactly, I think could be done with a syndication as well. The keys really the financing infrastructure interest So I can see, it gets fairly complicated to stick with the syndication example. mean, it, it sounds like a fairly complicated transaction to exchange this tenant and common interest. I'm just wondering, so what are some of the more detailed concerns when you go down this route of the tenant common interest? 

And then you know, making the exchange of the tenant common ownership share for membership in the LLC to use that example? I mean, it would, I can see, maybe you you wouldn't want to do this for a smaller investor in a syndication you would maybe want to go jump through these hoops for somebody who's investing a  quarter of a million dollars or something like that in a syndication were right there, just a larger chunk, whereas some of the 20 5000s a lot of paperwork, that kind of thing. I mean, what are some of those considerations?

Dave Foster  11:58  

Right, well  you're absolutely Right here, obviously, it's got another layer of things that have to be done in coordination with the clients, legal and accounting professionals as well. Because we have to take a property and file, dissolution papers, take the property that contributed to change depreciation schedules. There's all kinds of things that have to be done. it does complicated. financing, of course, is usually the big bugaboo. 

Because depending on what the financing is in place for the syndicators, they may not have the ability to take on any common investors. that's probably the biggest concern overall lies in the financing. But when you think about what syndication actually is, just as a word syndication just means a group of people getting together for a common goal and what you talked about the complications of being a smaller vessel You're getting into a limited partnership. 

Well, there are syndications that exist on different ways below that a syndication could be three people getting together to buy a waterfront rental. You call it a syndication of what they own it is 10. It's a government. They reach able to use their money and their resources to purchase part of something that's bigger than they could have done on their own.

But for my world, the real key is that when its tenants in common, you're actually purchasing real estate. You may be purchasing a smaller percentage of a larger piece of real estate, but you're purchasing real estate, and that's what qualifies it for the tax deferral of 1031. it could be just a couple people getting together as tenants in common. 

There are things called tenants in common projects which are actually specialty built RX were a large asset is divided up into more than 35 veterans. each investor owns their share as a tenant in common. There's a special revenue procedure that allows for that. Perhaps the biggest form of syndication, that is available for typically on investors now, especially for ones with less money is the Delaware statutory trust DST. Now, these are large, large apartment buildings, commercial projects, and those kinds of things that have been set up as a Delaware statutory trust. 

The trust is actually the owner of the real estate. But because the IRS and the SEC have nuclear weapons and the army, they get these. 2004 they decided that Delaware statutory trust interest qualified for 1031 treatment. here's what that's really beautiful. Because again, if my march to become passive, I want to trade time for money.

What I could do is 1031 until I end up purchasing a membership interest in October century trust. Now, it may only be $100,000 into a $5 million property. Guess what you don't get voting rights, with, that's what you own. But you also have an experienced large company that's managing your money, you're getting a return for it. But most importantly, you have continued the tax deferral that you started over the years. 

that's that's such a key I would have to have to put it on the screen today. But I've done a performant that we do a lot of our classes that shows what happens if two investors start with the exact same property. over the course of 20 years, they sell the property for the exact same return every is exactly the same. The only difference is the one investor takes the deferred tax and buys more real estate.

The other investor pays the tax. At the end of the time 20 years. The investor paid the tax has no no tax liability. they have almost $2 billion in real estate. The investor that the for the tax has almost $11 billion of real estate over there control and a tax bill of about $500,000. Which would you rather have

Dave Foster  16:31  

tax bill any day?

Dave Foster  16:33  

and other things that we could do to continue to mitigate that 1031 is not just a one time occurrence. 1031 is different in definitely. that's a key distinction.

Taylor   16:47  

He can really get that snowball rolling. I've heard about the Delaware Delaware statutory trust in the past, but I you know, it's it's it's black magic to me. I mean, can you explain Some of the basics of that structure  maybe in comparison to like an LLC because personally, I'm more familiar with like LLC structure. I mean, like, give me some of the basics of the Delaware statutory trust, if you would,

Dave Foster  17:14  

if you want some to sleep. The revenue procedure from the iris that approved oversaturate trust is 2004 dash 68. it provides a safe harbor. The trust is a Delaware statutory trust is really the same thing as a land trust. It's just a specific legal form that says this piece of property is owned by this entity, which is a land trust. in this case, it's a special for that called a Delaware statutory trust.

There is a sponsor, a syndicated it puts it together, a management structure that lays out how the activities and operations will be as There is also there has to be all kinds of sec compliance forms, because it is classified as a security. there's vetting, it has to be done. There's the sponsor, that has to provide disclosures, performance, operation, past history, all of those things. you're truly vetted out almost as a stock. 

You're looking at the strength of the company behind it, as well as the quality of the real estate, which makes it a really interesting animal. Those people who are just real estate professionals don't necessarily know how to analyze a stock, where security and those people that are just securities people probably don't have a clue to how to analyze real estate. The Delaware statutory trust brings us all together really takes a keen eye for both to be able to see is this structure compliant? Is this company sound and is the real estate asset sound beneath it?

Dave Foster  19:01  

Because all three of those things have to be a play for you to have a successful delivers national interest. Interesting. it's,

Taylor   19:08  

I'm going to have to dig a little bit more deeply into this in the future. I mean, is it still so you're sampling a Delaware statutory trust? Are you still  in addition to that, are you doing like a whatever doing a 506 be, like filing syndication type of like exemption and then going down that path? Are you just selling shares in the Delaware statutory trust? I mean, what are some of the kinds of components here? You could go either way,

Dave Foster  19:35  

the trust itself is just the ownership. Okay. Yeah, it's what goes on the deed. then whether you choose to go five or six, five or six p, or whether you choose to exempt from that is a decision that they make to accept investors. But whereas with a perhaps a better distinction is the difference between a 10 and a common project, and a DST primarily is that DST can accept delivered to numbers of investors. 

Okay, yeah. a $10 million piece of property, you could buy 1% of that property without 99 other investors in a Delaware statutory trust, when you are tense and competent, you're trying to comply with revenue procedure 2002 dash 22 as a Tenant In Common government, I noticed the I'll give you all kind

Taylor   20:24  

or night time reading

Dave Foster  20:25  

exactly that when you're doing that you can only have no more than 35 investors. Yeah. Okay. it's really just about the structure itself.

Dave Foster  20:36  

Good, quiet, quite a bit of complication in

Taylor   20:38  

this but you know, we're talking tax code. that's not

Dave Foster  20:41  

you know, we're talking tax code. This is Saturday.

Taylor   20:46  

Saturday is one of the best days of the it's one of my top seven favorite days to make money, right,

Dave Foster  20:52  

exactly like that.

Taylor   20:56  

Okay, so we've got all the structures and this these special Seniors, everything like that. 

Unknown Speaker  21:03  

what one of the questions that I have about this

Taylor   21:05  

is, what was what's what maybe we we want to do at 1031 exchange? We know we need a Qualified Intermediary. What are those kinds of fee structures look like? I mean, how much is utilizing a Qualified Intermediary? Getting impacted my returns or you know, is it crazy expensive? Or you

Dave Foster  21:24  

know, what do we tell you? That's one of the beautiful things is that first of all, the Qualified Intermediary has to be an unrelated Third party who handles your exchange it most most most important for your listeners, that QI has to be in place prior to the closing of the sale. If you close your sale, you receive the money. You can't hit 31 and I get the call once a month or twice a month, and it breaks my heart because they're so excited to do it together. What I just sold my property last week. 

Oh, boy. Okay, let's get excited for the next one, shall we? Yeah, it's a problem. I always try to make sure I slip that answer the people don't. But because the queue is an independent third party, all we can do at the transaction is the 1031. as you can imagine, QI firms set themselves up to scale to generate market share revenue, right? All we do our 1031 exchanges. we've got to reach out to do a lot for a lot of people. But what that also lends itself to the industry, or economies of scale, and concentration of internal effort. basically, because that's all we do, we get real good at it. 

we could do it with a small machine. these typically don't break your back. our realtor, think about what a realtor has to do selfies property. they've got advertising in the market, the guy showing you all sorts of things, and a realtor will charge you between both sides. 6% to do a 1031 exchange. Nationwide, the range for the Bitcoin is probably 750 to $1,000 does not break the bank whatever. 

As you get closer to each coast, they get a little more expensive. But region ality isn't really an issue because there was a federal statute. It just so happens that if they live in Redondo Beach, they have a higher mortgage payment, so they're going to charge more. Technically, attorneys will do these periodically, but not for their clients. Because they have to be a third party. They will do that they can be quite a bit more expensive. But usually it's just because they don't have economies of scale. They're only doing a few a year. you're paying for learning curve. But if you think you're 750 for $2,000 for a complete exchange.

Taylor   23:53  

Yeah, no big deal. No big deal. Okay, so another question that I have is that it's a little bit complicated to sell a property and invest in a syndication via 1031. What do you in your opinion? What do you think the 1031 exchange lends itself to the best in terms of you know, property class or investment strategy related to conquer?

Dave Foster  24:19  

Holy cow. Yeah, like that's like the softest.

Dave Foster  24:26  

Here's what happens. The hot shop turning into portrait because truly 1031 is for your entire life. we're getting married later later in life, right? It's so often she'll have a house, he'll have a house. They get married to move into one of them. They just became accidental investors. type of topic. Yeah. Well, they start to like the cash flow comes in from that, honey, how about if we bought another rental property? 

So they do now They've got two. they start to think, well, maybe I, let's sell one of them because there's so much equity in it. let's use the proceeds to buy two more pieces of property. That's what we call a diversification exchange. When you have a lot of pent up equity, you're able to assemble property, use the 1031 to buy more smaller properties that either have better cash flow, or reduce the amount of debt equity that you have. diversification exchanges, you go along this way for a number of years. If you wake up one day and you're tired, why are you tired? Because you're already on your fourth frantic landlord called and you realize 20 crazy properties out here, and they're driving me nuts. 

you sell several of those within a cadets time period and he used the proceeds to buy one Larger asset that again, can provide better cash flow. Or it may be in a different class, because you could sell residential and move into commercial, which is inherently more passive in nature. That's what we call a consolidation exchange. you can expand, you could contract. What's happening in California right now. 

Nobody's got cash flow, right? Because properties are so expensive, right. Meanwhile, that the Midwest, there's beautiful opportunities to get better cash flow. you could sell it for one region, to reinvest into another region using the 1031 exchange. There may be what's the hottest property class going right now Taylor? What would you say? Probably multifamily bank go. if this was three years ago, you and I will be having the same conversation. Let's go find support my family. But now when everybody wants it, What's the point? But three years ago? 

If you would have sold your single family properties and started to purchase multifamily assets, you would have been taken advantage of market in equities. where would you be sitting right now? So at there's actually multifamily owners right now. sit around going, huh? This is at a premium. What's the next market class? Yeah, absolutely.

That's going to pop. so you can use the 1031 to change classes to find places where the market is inefficient. take advantage that way. you could always use the 1031 exchange to move into more and more passive opportunities, whether they're large multi families that are self better managed, or whether they're commercial properties, a Delaware statutory trust, tenets of common syndications. 

you could do that all the way. At some point in time. You're going to want a vacation. Yes. why don't you do a 1031 exchange and sell a piece of investment property and go buy a vacation rental already in writing to generate income off of it, use it for yourself. that, yeah, I kind of just touch it on all kinds of points where the dead 30 was ethical.

I've used all of these for myself as well. But here's where I think the two single biggest applications are. if you This is actually my wife and I have made our real niche at that is that remember the 1031 exchanges, selling and buying investment real estate? 

Yes, but you do not have to leave that as investment real estate forever. You can in fact, move into that property after a certain amount of time. once you have lived in that property, Did you get to take advantage of the provisions in Section 1.1, which is when you sell your primary residence, a certain amount of that tax deferred game is going to become tax free.

Dave Foster  29:17  

Now, prior to 2008, you could accept all the game. the rule was right, if you lived in a property for two out of the five years before sale, you could sell and as a married couple, take the first $500,000 a game tax free. That was a great gig. you could do it once every two years. before 2008 what my wife and I did was we would periodically 1030 wanted to a really nice house for investment for a year and then move into it. 

Two years later, we would sell it and all of the game from 31 exchange, all of the game for when we lived it was tax free. That's pretty sweet. We put that money into the fund. doing that. finally, at a certain point in time, we were able to take real estate profits. we use them to buy a 50 foot sailboat that we lived on for 12 years and raised our boys on. Wow, that's cool. But passive booth. 

Yeah, since 2008, the IRS are pretty sure I'm a poster up at their office, because 2008 you can't get all of a tax free, but you do get to proceed. probably the greatest get going now is to position yourself so that you convert to 31 properties into your primary residence or a series of primary residences. What if you had like one of my realtors here in St. Pete has three waterfront condos side by side by side. When he's ready to retire, he's going to move into one of them. what he's done living there, his wife Is it when it's time to redecorate are moving? 

So he will then sell it, and he'll pay some tax. But he's could except a bunch of the taxes. Well, tax rate he's mocking, where's he going to move into the next one? heaven into the next one all the time taking somebody tax free, paid some tax and

Dave Foster  31:24  

what have you.

Taylor   31:27  

So how do you

Taylor   31:29  

how do you calculate that tax liability? I mean, it's a complicated calculation is a straightforward Is there a hard number? What does that look like?

Taylor   31:36  

This is why we all have account about Yep,

Dave Foster  31:39  

yeah. Right.

Dave Foster  31:41  

It's really not that difficult. once you have so if the property was the product of the 1031 exchange, you'd have to upload it for five years. You have to have lived in it for two out of the five years before you sell it. Did you get to prorate it between the time you looked at it the time you sold it. let's say you bought a piece of property used for rental for a year, and then you moved into it and lived it. for four years, you would get to take four fifths or 80% of the profit tax rate. Okay? That makes sense easy is that you do have to recapture all of your depreciation. you don't get away from that. 

Like I said, everyone's got tired of the free lunch. It was it was awesome, but it's still awesome over it's now. all those things are things that you could do Taylor, while you are going through the formal rhythm of being a real estate investor. Because what do we do? We look for opportunities to maximize cash. We look for buying opportunities for the for selling opportunities. We look for opportunities to be passive. We'd probably be remiss if we didn't talk about the other great tax Medicare. that's def Oh,

Taylor   32:55  

yes, of course.

Dave Foster  32:56  

Of course. The batch right at the 1031 Is defer, defer, defer at the die? Yes, because when you die, your errors, get all of your property of what is called a step up in basis, which means all of the deferred gain, that you've been deferred tax that up generating income on your life disappears. 

All the depreciation disappears and your IRS inherit the property tax free. what are they going to do that? First of all, they're going to buy your really nice headstone. Right. Secondly, they're going to start investing on their own. You have just changed your family's legacy and history for all time. I have clients that are out there a third generation. Wow. 

That started with us doing exchanges for grandpa at each point in time. The next generation has started with a clean slate and it started building Hero profiles. What an awesome thing to be able to leave to your family. Because you've already been able to enjoy it yourself. I don't recommend what you have to do to get it but it's, it's still

Taylor   34:14  

going to happen all of us someday.

Dave Foster  34:16  

Good to know that path. Yep, yep.

Taylor   34:19  

Yep. Alright, so we're going to take a quick break for our sponsors. Dave, I got three questions. I asked every guest on the show. Are you ready?

Dave Foster  34:29  

Okay. Let's do it. All right, let's go to the number one.

Taylor   34:35  

I should really actually really get that a copyrighted picture. But anyway, number one, what is the best investment that you've ever made?

Dave Foster  34:44  

You already mentioned the boat. I would call that the best investment I ever made, but it wasn't a real estate investment. It was returned to me every single time that we could definitely recapture duplicate. But it was because of real estate but In terms of real estate, I think the best investment I ever made was one immediately prior to the dark days to remember those 2007 2008 when life was not so good of your real estate investor vaguely I bought a tract of land and created a subdivision out of it sold the entire subdivision for a nice profit to a group who ended up going belly up in the great okay, but because I had salted it didn't over carry back mortgage. I was able to foreclose and get it again and repeat the process. basically, I made a bottle out of foreclosing and reselling.

Dave Foster  35:45  

It was it was

Dave Foster  35:46  

I get I don't recommend the heartache. But it was an awesome result.

Taylor   35:51  

Yep, yep, still have to pay a tax bill on the property tax bill and all that. it's not free to buy land. That's

Dave Foster  35:56  

right. But if you stay the course, even a bad investment contract Good.

Taylor   36:00  

Yeah, yeah, absolutely. On the other side of that, what is the worst investment that you've ever made? Probably that same one.

Dave Foster  36:09  

I would say the worst.

Taylor   36:14  

They say that boats are a hole in the water that you throw money into. if you hadn't gotten the memories,

Dave Foster  36:19  

yeah  the happiest day of my life was at that bought at the saddest day of I was the day I sold. I'd be outlier that selling is fun. I, I really can't think of a truly bad investment. The one that performed the worst for me was a single family home that I bought in Stamford, Connecticut, that we rehabbed it, and we were live live moved in and looked at it, and we were ready to sell it. we had a broker's open house with 50 brokers that came by just to preview it. but that was on the Sunday prior to Tuesday.

Dave Foster  36:59  

September 11 2001.

Dave Foster  37:04  

And we did not get another showing up at property for six spots. It ended up

Dave Foster  37:12  

unfortunate accident.

Taylor   37:14  

Yeah, yeah, dark days. dark days Indeed, I guess, if you will. my favorite question of these last three is what is the most important lesson that you've learned in business and investing?

Dave Foster  37:29  

patience. Patience is your ally, whether you're 16 or 65. Markets coming markets go and they were on to see where I've seen over the course of what I have been through now four or five different complete market cycles is that there there gets this sense of mass hysteria. With things are going up and so people are having to get in before it's over. 

Not realizing It's really not over, it just goes back down. depending on where you're at, you could get hurt really, really badly by that panic. Whereas if you are patient to wait, the buying opportunities always come back around. all you've done is avoid a lot of banks of Africa to try to hold on to bad investments and bad properties until they turn back around a cup. I heard a really interesting statistic just last week, that we're talking about the average length of real

Dave Foster  38:39  

estate cycles.

Dave Foster  38:41  

It's much longer than we think that I did tire cycles really 1618 years. Those cycles typically only involve two to three years of correction.

Dave Foster  38:56  

Several years of stagnation

Dave Foster  39:00  

The bulk of the time is in growth.

Dave Foster  39:04  

So, if

Dave Foster  39:06  

you are getting in with you're really nervous about what's going to happen,

Dave Foster  39:09  

rather than sitting on the sidelines,

Dave Foster  39:12  

you could be in a recipe without losing quite a bit of your equity immediately. But if you're patient, it feels like you're waiting forever, but you're really not. that I think is probably the biggest lesson.

Taylor   39:28  

Hmm, I like that a lot. Dave, thanks for everything today. The 1031 is a great topic and you definitely shed a lot of light on specific ways we can use the 1031 specifically as it relates to syndications and we got a lot more information in there as well. thank you for that. Where can people get in touch with you if they want to learn more about what you do? They want to ask more questions about testing

Dave Foster  39:52  

in touch with me is going to be through our education portal, which is the 1031 investor calm we've got a YouTube channel With instructional videos, calculators, blogs, you can connect with me through there. certainly would love to be a resource to you and all your game.

Dave Foster  40:11  

Great.

Taylor   40:12  

That is a great URL, the 1031 investor. That's fantastic. the links will be in the show notes as well for anyone that missed it or if they don't want to punch that all into your, your search bar. thank you for everything today. Once again, it's been a great conversation and I hope to have you have you back on again. I look forward to that be awesome. Maybe we'll do a Saturday interview again. Yeah, perfect. Everybody out there. 

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