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1031 Exchange Analysis
1302 LINDEN AVE, Minneapolis, MN 55403-1253
Presented by Jake Mahabadi, MRG Realty Partners
Estimated taxes
Sell for
$3,700,000
Total taxes
$934,135
| Traditional Sale | 1031 Exchange | |
|---|---|---|
| Cost Basis | $1,000,000 | $1,000,000 |
| Gain on Sale | $2,700,000 | $2,700,000 |
| Depreciation Recapture (25%) | $127,923 | $0 |
| Federal Capital Gains Tax (20%) | $437,661 | $0 |
| MN State Tax (9.8%) | $265,950 | $0 |
| Net Investment Income Tax (3.8%) | $102,600 | $0 |
| Total Tax (34.6%) | $934,135 | $0 |
1031 Reinvestment Options
Retail
Office
Industrial
SFR Rental
Multifamily
Hotel
Land| Max Purchasing Power | $3,478,000 |
| Annual Cash Flow | $125,829 |
| Down Payment | 62.9% |
| Estimated Transaction Costs | 6.0% |
| Cap Rate | 6.4% |
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 $1,670,650 more with a 1031 Exchange.
1031 Exchange
Reinvest in Retail
| Transaction Costs | 6.0% |
| Estimated Tax Rate | 0.0% |
| Cap Rate | 6.4% |
| Total Cash Flow | $1,258,286 |
| Equity Value in 10 Years | $4,188,019 |
Traditional Sale
Pay Tax and Invest Proceeds
| Transaction Costs | 6.0% |
| Estimated Tax Rate | 25.2% |
| Rate of Return | 7.2% |
| Total Cash Flow | $0 |
| Equity Value in 10 Years | $2,517,369 |
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
The Exchange Company You Can Trust
6,800+
Exchanges Completed
50+ Years
Team Exchange Experience
★★★★★
100+ 5-Star Google Reviews
No Fee
Never Any Exchange Fees
Built by a team with deep experience from...
