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1031 Exchange Analysis

1302 LINDEN AVE, Minneapolis, MN 55403-1253

Jake Mahabadi

Presented by Jake Mahabadi, MRG Realty Partners

Estimated taxes
Sell for
$3,700,000
Total taxes
$1,059,910
Traditional Sale1031 Exchange
Cost Basis$492$492
Gain on Sale$3,699,508$3,699,508
Federal Capital Gains Tax (20%)$554,925$0
MN State Tax (9.8%)$364,402$0
Depreciation Recapture (25%)$2$0
Net Investment Income Tax (3.8%)$140,581$0
Total Tax (28.7%)$1,059,910$0
Edit Assumptions

1031 Reinvestment Options

Max Purchasing Power$3,478,000
Annual Cash Flow$125,829
Down Payment62.9%
Estimated Transaction Costs6.0%
Cap Rate6.4%
Strategy

Invest in retail centers with strong anchor tenants to secure stable cash flow.

Advantages
  • Stable income from long-term tenant leases
  • Tenant diversity reduces vacancy and income risks
  • Rent escalations offer protection against inflation
Risks & Downsides
  • Shift towards e-commerce may reduce demand
  • Vacancy rates can increase during economic downturns
  • Retail is sensitive to consumer confidence and spending habits

1031 Exchange vs Taxable Sale

1031 Exchange
Pay taxes and invest proceeds in S&P 500

In 10 years, you'll earn $1,923,202 more with a 1031 Exchange.

1031 Exchange
Reinvest in Retail
Transaction Costs6.0%
Estimated Tax Rate0.0%
Cap Rate6.4%
Total Cash Flow$1,258,286
Equity Value in 10 Years$4,188,019
Traditional Sale
Pay Tax and Invest Proceeds
Transaction Costs6.0%
Estimated Tax Rate28.6%
Rate of Return7.2%
Total Cash Flow$0
Equity Value in 10 Years$2,264,816

Other benefits

Purchasing Power
Increase leverage and reinvest all proceeds to grow wealth faster
Estate Planning
Transfer properties with deferred taxes, optimizing inheritance
Improve Cashflow
Maximize returns by increasing your rental income
Manage Passively
Exchange into DSTs & NNN properties for hassle-free oversight

You're Pre-Qualified for a 1031 Exchange

Same investor entity
Must purchase with HENNEPIN COUNTY 65403 1302 LINDEN AVENUE LAND orsame taxpayer
Replacement Property Value
Reinvest $3,700,000+ to defer all gains
Replacement loan
Must purchase with $1,290,179+ Loan to defer all gains
Timeline
Identify within 45 days; Close within 180 days
Process OVERVIEW
Deferred Process OverviewStart Exchange

Exchange Experience You Can Trust

$8 Billion

Exchanged to date

40+ Years

Exchange experience

$100M

Surety Bond & E&O Coverage

★★★★★

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