1031 Exchanges Explained
“Let’s talk about that huge class of baby boomers, who have now been joined by all of the millennials and the people that want to get out of the rat race. There’s a bunch of things they’ve got in common in 1031.”
Welcome to the Next Level American Dream Podcast. We have an amazing guest for you today, but first please make sure you have subscribed if you haven't already. We also love getting your feedback through likes, comments, ratings, and reviews. Today, Sean has a conversation with Dave Foster. Dave is the Founder and CEO of The 1031 Investor. He is a degreed accountant and qualified intermediary and consultant for tax saving strategies such as the 1031 exchange. Throughout his interview, he dives into anything and everything 1031 Exchanges and answers the most common questions investors have on this strategy. If you found any value from today's episode, then please share it with a friend and help us grow.
Key Topics
Tell us your background
What is a 1031 Exchange?
What are the qualifications for this structure?
When would you not want to do 1031?
What are some common issues and how do you prevent/combat those?
What does the American Dream mean to you?
Connect with Dave:
All social media: @davefoster1031
website: https://www.the1031investor.com
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SUMMARY KEYWORDS
tax, exchange, property, pay, sell, buy, real estate, syndication, tax code, money, defer, years, investor, investing, connecticut, leverage, american dream, sale, qualified intermediary, dave
SPEAKERS
Sean Thomson, Abigail Thomson, Dave Foster
Abigail Thomson 00:01
Welcome to the Next Level American Dream podcast brought to you by Thomson Multifamily Group. Your hosts, Abigail and Sean will discuss how you can take your American dream to the next level through real estate investing, business practices, and personal development. Join us as we share our experiences as a father daughter duo who are trying to accomplish their goal of financial freedom. We hope you learn more about how to define and achieve your American dream. Here's another episode of next level American Dream. Welcome to the Next Level American Dream podcast. We have an amazing guest for you today. But first, please make sure you have subscribed if you haven't already. We also love getting your feedback through likes, comments, ratings and reviews. Today, Sean has a conversation with Dave Foster. Dave is the founder and CEO of the 1031 Investor. He has a degree in accounting, a Qualified Intermediary, and a consultant for tax saving strategies such as the 1031 exchange. Throughout this interview, he dives into anything and everything 1031 exchanges, and answer some of the most common questions investors have on this strategy. If you found any value from today's episode, then please share it with a friend and help us grow. For more information on our sponsor, visit thomsonmultifamilygroup.com to start taking your American dream to the next level.
Sean Thomson 01:20
Dave, thanks for coming on the show. Appreciate you being here.
Dave Foster 01:23
It's great to be here, Sean, thanks for having me.
Sean Thomson 01:26
So let's, let's start with just kind of give the people a little bit about your background, where you come from, and then where you are today.
Dave Foster 01:33
Sure, well, in my day job, I am a Qualified Intermediary for 1031 tax deferred real estate exchanges, which is this little known but much used part of the tax code that allows people to sell investment, real estate, and buy investment, real estate, and not have to pay tax on the profits in the middle. And instead those profits go to you to increase your investing. So that's my day job. At night, I pull up my supersuit and go into superhero mode, as a frustrated and yet determined real estate investor, just like everybody else. Yeah.
Sean Thomson 02:16
So let's talk about so let's talk about 1031. I love Tim 31. I love having these discussions, because I think I mentioned this to you a moment ago, but you know, cost segregation and 1031 A lot of these tax issues even I think I have a grasp on them. And and even me, I get confused and lost every now and then. So I like to talk about them as much as possible just to kind of learn myself more information. But then also I'm sure there's a ton of people out there that can use this information. So let's start by just what I think you touched on just briefly on a high level there. But what is what is a 1031? Exchange if you had to sort of encompass that in the definition,
Dave Foster 02:51
right? Well, like we said, it's involving investment, real estate, selling investment, real estate, following a IRS regulated process, and then purchasing new real estate, and being able to use the deferred tax to buy more real estate. So basically, you're getting to leverage your sales, so that instead of paying the tax, you're able to buy more real estate. And I think maybe actually if we back up even a step further, there's something that's been really just blowing my mind for about the last month. Now a mentor of mine made this statement to me. And we were talking through some things related to tax codes and that kind of stuff. And he says, Dave, stop thinking about the tax code as a way for the government to raise dollars. It's not the tax code, ultimately, is a behavior, incentivize her. And if you use the behaviors, that the tax code provides form, you'll be rewarded, right? If you don't choose to pursue those behaviors, that's when you're going to pay the tax. And the consequence of that scene is that the federal government, then as the dollars that they need to build roads and highways and hospitals and everything else, but ultimately at its core. And this is just I think such a beautiful description of the tax code. It exists to incentivize your behavior. So let's think about the 1031 exchange. What how would that what behavior are we trying to incentivize? If you sell property, real estate, and then buy more real estate? You don't have to pay the tax. So what's the behavior? we're incentivizing? Real estate investment, more investment, right, exactly. The source of the code is from 1920. It's one of the earliest parts of the code and originally What we had is we came out of the Agricultural Age. And we're starting to move into the industrial age, we had a lot of farmers who were trying to grow their holdings. So they would sell a small farm. And then they would want to go buy a bigger front. But the problem was during that time, cash was a shortage. So by the time they sold their small farm and paid the tax, they would not have the money to go buy the larger farm. Right. So we had agricultural agriculture at a standstill. So the IRS instituted section 1031. If you sell a farm, use the proceeds to go buy a bigger farm. You don't have to pay the tax. What's our incentive, buying bigger farms buying more. And we think about what that does to the economy, such an awesome stimulation to the economy. Because if real estate transactions stopped, particularly on the investment side, what else doesn't happen? For every real estate transaction, we lose, there are two realtors that don't get paid commissions. There's two title companies that don't get a right title insurance, there's two inspectors that don't get to inspect the houses. There's two appraisers that don't get to appraise. There's two painters who don't get paid at cetera, et cetera, et cetera. So what you're doing as a real estate investor, is you're like this little mini Cosmo one person, economic stimulus engine. Because every purchase we make, as an investor provides the opportunity for a whole ton of people to practice their trades. And even more importantly, every property that I sell smaller, to go buy something bigger is an opportunity for that younger new investor, who can now afford to buy the property that I'm selling. And so that's 1431. got its start. And then of course, it's evolved over the years and it wasn't heard of much. And it was for those who are really lawyered up for a long time. But and this is where we can kind of get into a little my, my personal story. But in the mid 90s, my wife and I were trying to contemplate what it is that we were going to do to get off the corporate train. We both had high pressure high provocateurs, and this magical event happened. You know exactly what I'm talking about. We had our first child. Oh, yeah. I mean, did you throw away your TV? When the kick game is on my gosh, all I wanted to do was just watch this little bundle of joy. And we realized, right, then the greatest commodity we had was not money. It was time. Yeah. time to spend with this one. And the ones that follow. So how could we start to carve a life that would create the margin, so we can maximize every second that we had with our family, and at the same time to provide for our needs. And like so many people today, I got the bright idea of, oh, let's just start investing in real estate. Right? So 1996, I went bought a duplex in Denver, fixed it up, sold it, made a bunch of money went to my accountant, because every account should have an accountant. Otherwise, if you do your own, you've got a fool for a client. And I found out that I have a silent partner. And his name was Uncle Sam. Yeah, the government. Oh my gosh, well, that just changed the whole paradigm. Because now a 10 year goal was looking like 20 to 25. Because of all this tax, we would have to pay. Right at that moment in time, there was a huge tax case that was settled, where the IRA is actually lost. And 1031 exchanges we're now going to be available for the regular everyday investor. Some friends of mine, some really dear friend show those are the ones who can mock you mercilessly, and then offer you an olive branch. Oh, look at your tax. Dave. Don't you wish you didn't have to pay that? By the way? We're going to start a business has qualified intermediaries to do these for others. Do you want him? I said heavens, yes, this is the deal. 10 years later to the day, using 1031 exchanges for myself, and a series of moves across the country. We were able to set sail with our boys on a 50 foot sailboat with passive income from our real estate investments without having paid a penny in capital gains tax on the real estate sales over 10 years.
Sean Thomson 09:57
Yeah, that's amazing. So are you in your state Are you? Are you holding most of your properties? Are you? So how does it work for you? You're selling? I guess you're selling some deals, upgrading your other deals? And are you holding some of those at the same time? Are you doing both strategies?
Dave Foster 10:12
Yeah, actually doing a little bit of both. 1031 Ra is only available for those who purchase real estate, right with the intent of holding for productive use. So it's really not designed for fixer flippers right over if I would have known about that. When I bought that stupid duplex. You know what a duplex in Denver's going for an hour. At a time it has kept it, I would have put a renter in it, I would have refinanced it. And I would have used the proceeds to go buy the next property. Yeah, that's how you can make 1031 work, even if you got a flippers mentality. Now, what we did was we very specifically used a confluence of two parts of the code, we used section 1031, which allows you to sell or buy investment real estate without paying tax in the middle. And we combine that with section 121 sales, which your primary residence. And if you live in a property that you own for two out of the five years prior to selling it, right, then you get to take as a married couple. The first $500,000 of profit, tax free. Right, so here's all combined. Now section. Tip 31 Is any type of investment real estate. So you may want to start out in single families go to Multis go to commercial, go to passive types, whatever you want, you can do any time and it can be anywhere in the country. So what we found out really quick, surprise, surprise, if you want to live on a sailboat, Denver's probably not the place, right, there's not a coast. So we started planning to get to water. And the first place that we found we could get to was Stamford, Connecticut, on Long Island Sound. So strategically, as we built our Colorado portfolio, we would occasionally move out of the house we had bought, and we're living in and sell that to take the profits tax free. And that went in to buy the boat kitty, right. And then we would move into one of our former investment properties. Because again, the 1031 intent, you have to use it for investment purposes for a year or two. But at the end of that time, you can convert it into your primary residence. And under the law at that point in time, by converting it, we got to take the full 500,000 in profit the next time we sold it. So when we figured out we were going to go to Stamford, Connecticut, we started to move our portfolio with 1031 exchanges to Connecticut. So it was there ahead of us. As we left Denver. The last thing we did, we sold our last primary residence. That money went into the boat kitty. Where did we move in Connecticut into another one of our former investment properties. And then while we were there, we kept buying more investment properties. But we realized another very significant thing. And by the way, Shawn, if this makes me look like the dumbest guy on the block, it's very accurate. We forgot, just like we forgot Denver didn't have any coast. We forgot the Connecticut has snow. Cold. Yeah, it gets cold. And we said my gosh, we asked God to let us go to water. But we forgot to ask for warm water. So then we said okay, wait a minute, let's regroup. Florida is it? So over the course of the next couple years, we started to move our portfolio to Florida, in the form of small multi families, and vacation rentals. And when we were ready, I throw away the snow shovel. I sold our last house in Connecticut. We were living in that money went into the boat giddy because it was tax free. And where did we move into Florida? Well, we actually didn't need to move into any one house. We were able to move into for just periods of time at a time. Any one of our vacation rentals, whichever one was available. We just went and stayed in because we were able to buy the boat At that point, and move into it full time. So in the course of exactly 10 years, to the week of setting the goal, we were in Florida, with a portfolio of income producing properties on site management for everything. A boat that was paid for in cash. And we started living our, like your podcast, we started living our dream, ever he stopped boys on that sailboat for 10 years without paying a penny, in tax using a 1031. Exchange.
Sean Thomson 15:34
Yeah, that's incredible. So I, I gotta look, I got a little loss. And so I want to I want to circle back on a couple things. Right? I want to I want to make one, one quick reference point. So the basic basis of what you're talking about is, if you sell a property for let's say, you make $100,000. And normally, you would have to pay maybe a 25% tax on that, right. So you would have another, you would then have $75,000, that you could invest in another property, if that's what you chose to do. If with the 1031 exchange, you can take the full 100,000 and invest that into the next property and defer that tax until somewhere down the road, right? That's exactly
Dave Foster 16:12
right. As a matter of fact, we've usually we've got a great example of this, that lays out in for transactions to investors start out with the same exact sale $100,000 gain, just like you said, right? One of them pays 20%, tax 50% Federal 5% state, they pay the tax. So what are they left with? $80,000? They don't owe any tax. But they've got $80,000. Which at 20%. Down buys you $40,000 property, doesn't it? Right. But the investor that does the 1031 exchange, defers the tax, so they still owe $20,000, but they don't have to pay it now. Which means they have $100,000, right? Would you 20% Down, buys you a $500,000 property, right. And if you take that forward five years, at the exact same rates of appreciation, and they sell them do it again. And then 10 years, they sell into it again. And at 20 years, they sell and do it again, nothing else different. No other purchases, nothing. At the end of that time, 20 years, the investor that used the deferred tax, for their own purposes, owes $500,000 in tax to the government. But they own almost $12 million of real estate, right? His second investor doesn't owe a penny in tax. But they only have about three and a half million in real estate. And the difference is being able to use the deferred tax with leverage to buy new real estate. It's like a form of compound interest. Because you're gonna make money off the tax. And when you sell, you get to continue making money off the money you made on the tax. And when you sell again, you make money off the money off the money you made on the tax. And that train, my friend can keep going as long as you want.
Sean Thomson 18:32
And you know, especially if you're leveraging the properties, you can scale that up dramatically. And there's even even that guy that has the $12 million and owes the 500,000 doesn't have to pay the 500 till he transacts that property and he can just continue that process indefinitely so he can he can buy the next one on a 1031 and just keep kick that can even further down the road. Right
Dave Foster 18:53
on a $12 million property. If you're making 10% You know, that's 100 grand a month. Months does it take to pay off 400 $500,000 tax that's five months operating income at the end of the time. You still own gold money doesn't really stink,
Sean Thomson 19:12
right? That's still making 100 Yeah, I was gonna ask what's the you know what the so the person that paid the tax outright and he probably still paid 300 350,000 tax right.
Dave Foster 19:23
I think it was a little over 200,000 Because remember, he was not making profit off of the deferred tax right so he didn't have to pay nearly as much tax I think he's 220 or something like that. $1,000
Sean Thomson 19:37
So you have Yeah, exactly yeah,
Dave Foster 19:40
yeah cuz he made less than that. Right But
Sean Thomson 19:43
he he paid paid half the taxes but but has a third of the third of the wealth developed?
Dave Foster 19:49
Exactly. And there's always those people investor B's one of those types of people. I talked to them every week, who say not Dave, just pay The tax, you're going to have to pay it anyways. And I just do a check just respond 20 years 12,000,003 and a half, which would you rather be? And no, I don't have to pay the tax ever. There's what I like to call the four ds of tip 31 of St. Mary. D, number one, defer. Because as long as you never sell a property, you never have to pay tax. And when you do that 1031 Exchange, you indefinitely defer paying the tax. Deed number two, differ. Because anytime you sell that property and do another 1031 Exchange, you'll never have to pay the tax. You keep leveraging up. Anytime you want to change classes of real estate, to go from residential to commercial, you can use the 1031 and defer paying the tax. You can go from maybe an area like California, that's high appreciation into a Midwest area where the cash flow is higher. As long as you 1031 You'll never pay the tax. You can go find those little areas where there's market inefficiencies where the crowd hasn't figured it out yet. And using the 1031. Co buy there without paying the tax. You're in for the fourth day. Yeah. I
Sean Thomson 21:37
know, I was expecting it. I'm honestly but
Dave Foster 21:41
yeah, defer. Defer defer, just keep it going. And then die. Because when did you die owning real estate, your heirs get that property and what is called a step up in basis, which means they inherit as if you paid market value for it. Of a day you died. That guy was with $12 million in real estate. When he passed away, that money went to his children, as if they paid $12 million for that 500,000 of tax. Gone, gone. And they were able to start over doing their own investing. Yeah, yeah. What a legacy wealth gift. None of your kids went into medical school. Did they know? Okay, well, be careful. Because if there's a sudden change of heart, you may have told them too early. And they're trying to figure out a shutout machines on that.
Sean Thomson 22:40
No, she's my partner. She's She's She won't. She won't be doing any of that stuff. So for sure.
Dave Foster 22:47
So I'm motivated more.
Sean Thomson 22:49
Yes. Give me all the way earlier. She knows what I'm looking for. She knows I'm looking to kind of coast a little bit so she's she all she has to do is make me you know, make we make enough money. And I can I can coast a little bit should be that's all I need to get. Get me out of the way. The let's talk about so let's talk about some some cases where 1031 may be a bad idea. Is there? Is there are there any instances, you know, like for us in I'm in multifamily. Right. So we do cost segue and all kinds of other things. And so you can multifamily, you can kind of like you said defer that and cost segue it and you know all kinds of stuff to where you're got tax credits, you know, more than you ever need. But are there are there times where 1031 may be a bad idea?
Dave Foster 23:32
Ah, well, you're certainly because one of the so if you're trying to ratchet down your leverage, and you're the requirements of the 1031 to avoid all tax are that you have to continue to purchase, at least as much as you sell using all of the proceeds to do it. Well, so generally, that means if I'm hearing debt on a property, sell a property for 100,000 with 50,000 in debt, I've got to go buy 100,000 In real estate, using 50,000 in cash, which generally means I'm going to take more data. And so it's, again, the incentivized or the government, right? Keep buying more, keep buying bigger, keep it rolling for there comes a point in everybody's life when taking up a little extra bit of leverage at this time, might not be the best thing. So you've got to monitor your leverage. There's a bunch of ways to offset that. For instance, you can do a partial exchange, simply not replace some of the debt. You pay tax on a little bit, but you still sheltered from tax. Another way to mitigate some of that would be to do what I call defensive investing. Take the proceeds from your sale and split it up into two purchases. How a huge fan of this model. Yeah, what are those purchases is going to be for cash One of the purchases to get to the amount you need is going to be something with maximum leverage. Now, what did you do? What do you do that? Well, first of all, you just got a property out of harm's way, all you got to do is adjust rents to keep the lights on, and insurance paid, that property is yours forever, it's our risk. Now, you're probably not making as much on it an ROI perspective. But on the other side, you've got a property that's maximally leveraged. And so you get the higher ROI of leverage on that property. So by blending those two, you're actually able to shed some of your risk. And one of the other things that you can do then, is if you ever want to, there's a free and clear property that's ready for you anytime you want to do a refinance, right leveraged. And that actually segues into probably, I guess what I would say the next most difficult time to make a 1031 work. And that is with a syndication could be multifamily syndication. Those are really the rage now, but could be commercial, whatever it is, wherever a group of people get together and buy a property and start to sell membership interests in the entity that owns the property in exchange for certain types of return. That's a syndication 1031 does not work with that, right? Because the 1031 exchange has to be a sale of investment, real estate, followed by the purchase of actual real estate. And since they're buying a membership interest in an LLC, or a limited partnership, that's not buying real estate. So that won't work for the 1031. If less, the syndicator. Has got financing internally. So they could sell to the 1031 Investor, a portion of the actual real estate as a tenant in common. You're in the business, you know exactly how difficult that can be. Right? So about the only syndications I see that will do that are requiring like 750 to a million dollars, before they even think of doing something like that. So it can be tough to go into syndication.
Sean Thomson 27:28
It's costly, and it's it's complicated to put together. So there's a lot there's a lot to it has to be kind of worth exactly worth the effort.
Dave Foster 27:37
Ah, but let's go back to that last example. I had to go to fits of investing. What if you did your 1031 Exchange, you reposition it. So you got an asset gets leveraged, and you're generating rents for to come in pay for itself. And you have a property that's free and clear. Refinance that property, and use those tax free proceeds to go and invest in a syndication. Holy crap. What you did was you just add gasoline to your investing fire. You sold one, you now basically own three assets. One, that's what that's that's got very little leverage. One that's got a ton of leverage. And one that's a syndication? I really started to protect yourself from a lot of directions in a scenario like that.
Sean Thomson 28:34
Yeah, wow. Man, you can get in the weeds fast with these things. There's so many opportunities or possibilities with what's possible. It's mind boggling. And that's why I said early on in our discussions, I love talking about these things. Because it's it's always revealing itself, the layers of the onion, kind of keep coming off if you
Dave Foster 28:53
like those kind of things. I'll give you a couple more strategies you want to use for the temporary one now? Yeah, keep those times, folks want us to talk about the rules of 1031. I'll give you 15 seconds on that because it's no fun. But it's got to be realistic. We talked about that. timeframes are very short, you've only got 45 days to identify your potential replacements at 180 to close. So that actually becomes another difficulty in doing a 231 exchange. If the market is as hot as it is today. It's difficult to find properties to purchase. So it can be difficult to 231 I get that. And so maybe you just want to sell me the tax. But here's the poison bill of the 1031 exchange, the best time to sell and started in 31 Exchange. a seller's market is the worst time to buy a property and complete your 231 exchange because it's seller's market. But the reverse is true as well. The worst time To try and start it in through an exchange is a buyers market. But that's also the best time to complete an exchange. So what you have to do is just recognize that there's going to be these hurdles. And there's this structure, that no matter where I've added the market, I have to overcome. So if it's a seller's market, I'm selling for top dollar, I probably need to make sure that it might take 31 replacements i a lot that I need to buy at market value. I'm not going to get three years ago prices on a property I buy today. But I also didn't sell my property for three years ago prices, and you just have to recognize that. So but that's another charge that can be there. Now the IRS wants to see the entity stay the same. So whoever the taxpayer is selling, it has to be the taxpayer that buys it. And that's why in a syndication, if you own a membership interest, you can't 1031 When that sells, now, the syndicator, the LP could sell them to a temporary one, because they actually hold the real estate, but not the individual members. So you've got to monitor who it is, who's the actual taxpayers of the property. And then we alluded to, we alluded to two things. Number one, you have to use the services of a Qualified Intermediary where the unrelated third party, all we do is process the 1031 exchange, and keep you straight of all the rules. But you have to use us. And they have to be involved prior to the closing of your sale. And the reason why I say this every time is because I still get calls. After 22 years, I still get calls every month, saying Dave, I sold a property last week, I'm ready or not. Alright, I cry with them, but they can't do it. And then of course, lastly, we talked about the reinvestment requirements, you want to do for all times you got to buy more than you sell. So we've alluded to a whole bunch of these ways to transition and sell them. Let's talk about that huge class of baby boomers, who have now been joined by all of the millennials. And the hipsters that want to get out of the rat race. Now, the financial independence retire early to folks that are retiring at a regular age. There's a bunch of things they've got in common in 1031, it can work with these. So well. The first one is that there's a great migration that you can use with your 1031 exchanges, to move your portfolio from states that are taxed to states that are not. Now you and I both are residents of two tax free states. So guess what, by itself, you and I, even if we did do 231 exchanges, we would not have to pay state income tax on our profits, from the sale of properties, or operating income. But there's generally a strategic move to Florida, Texas, Nevada, Washington, Tennessee's massive now because they're all tax free states. And again, just following our model, you move your portfolio there before you're ready to retire. So it's waiting for you. As long as you're a resident of another state, you're probably gonna have to pay tax, but that's okay. We're still deferring and all with the 1031. Then when I sell I last property in Ohio. That was my primary residence. So the proceeds are tax free. Or how does it get any of that? As I walk out the door, and I go to Florida, and I become a Florida resident. And right away, I just eliminated any state income tax. That's retirement. And as long as I own all those properties, I never pay tax, state wise on the income, and I certainly don't pay on all the different tax that's there. And then periodically through retirement, what we could do, I've got a guy in St. Pete Beach, who's a realtor that happened to buy three identical condos, side by side, all facing the ocean. His retirement plan is a data kind of choice. I can deliver pizzas for Domino's. I can bag groceries at the Publix grocery store. Or I can move into one of my condos. As of I think I told you to choose, right? Because when he converts that to his primary residence, and he's lived in it for a long enough period of time, even though it was formerly an investment property, when he sells, he will still get to sell and take a proration of the gain tax free for the time that he lived in it. So if you rent it for a year, and then lives in it for four, he'll get 80% of the gain tax free. Yeah, well, if I'm gonna have to pay tax on my income from dominos, I'd rather pay tax that way. But where do you think he's gonna
Sean Thomson 35:44
move? Yeah, for sure. He's, he's gonna move in those condos right next door. Exactly. Yeah. Next Door, right. Just can't you just keep moving into the condos, right.
Dave Foster 35:54
I asked his wife and said, How do you know it's time to move. She said, now it's time to redecorate versus move. Like, okay, I get it. And so you can slowly over the course of your life, chip away at your portfolio by getting a mix of tax free money, and a mix of tax money. So it's not like you're just trying to hold on by your fingernails, so your heirs can inherit it. You can be very strategic with the gas pedal and the brake, to keep enough money coming in, that you can afford to live. But at the same time, keep as many properties as you can, in tax free status. And that's what it's a great time. For us it was the boat. For others, it's an RV. For others. They simply choose to have a whole bunch of investment properties, and all of their favorite vacation spots. So they may have a ski condo in Breckenridge, they may have a cabin in the Smoky Mountains, a beachfront property in Sarasota, something in Port Aransas, something and up near Disney World in Orlando. And you know what their retirement model is? They hop in the RV. And whichever one is open, that's where they're going that week.
Sean Thomson 37:14
And it's all just using that the the tax, like you said, the tax codes that incentivize this type of behavior. Right?
Dave Foster 37:21
Exactly. Because that's exactly what the IRS wants to see you do. keep money in real estate, and keep growing real estate. Because it's a great economic engine.
Sean Thomson 37:32
Right, exactly. Well, Dave, so I, I, I'm interested to hear your answer this question. I asked everybody on the on the show about what their American dream is. So what is what is the American Dream for you?
Dave Foster 37:42
The American Dream, for me was time is time. It's it's just life is all about time, and relationship. And the only way you can have real relationships is with time. So time is the commodity that you want to try and grab. So that that frees you up then to have those significant relationships. Life is short, the money at the end isn't gonna matter. And certainly, like Mark Twain said, 20 years from now, I'm not going to be thinking about the things that I did, that I messed up on. I'm gonna be more regretful of the things that I didn't do. And the only reason I don't do them is because I don't have enough time. Yeah.
Sean Thomson 38:29
Yeah. That's amazing. Well, a day. So how can people reach out to you and get more information on 1031 exchanges, your services that you provide and learn more if they have questions about 1031 Exchange, what's the best place for someone to go to to?
Dave Foster 38:44
The best way is to simply go to the1031 investor.com. And we've got like, a 32, video, YouTube series, calculators, articles, questions, prover views, and contact phone number so you can catch us through their easiest can be
Sean Thomson 39:05
Yeah, that's perfect. I'll be definitely checking that out. Thanks for coming on. I'd love I love talking about this stuff. It's it's it's so complex, but it's it's it's it's easy at the same time, once you kind of start to grasp some of the fundamentals of it, I think. And I really appreciate you sharing your story and how you've kind of used this stuff in your own life and how to, we can use it in our lives. I really appreciate you sharing all that with us. Thanks for coming on.
Dave Foster 39:28
Absolutely been a pleasure.
Sean Thomson 39:29
Thank you. We'll talk to you soon.
Abigail Thomson 39:31
Thanks for joining us for another episode of Next Level American Dream. If you would like to learn more about what we talked about today. Want to contact the team directly or interested in passively investing and being a part of our deal room? Head over to our website at www.thomsonmultifamilygroup.com Before you go please leave a review your comments help us create more episodes for you to enjoy.