The Cruz’s eliminated ownership hassles, increased cash flow, and designed their lifestyle without taking on the risks of a 1031 exchange.
The Cruz’s, long-term owner-operators of a 17-unit multifamily property, wanted to retire from the real estate business. Their property was in disrepair, but they didn’t have the cash to fund improvements so it was a challenge to keep it leased.
To complicate matters, a sale would trigger a tax-bill and they didn’t know what to do with the money: they didn’t have compelling investment ideas that would help them reach their income target without taking on more risk than they were comfortable with.
They decided that selling and doing a tax-deferred 1031 exchange was their best–and only–viable option. The problem was, after hiring an agent and putting their property on the market they didn’t receive an offer with acceptable pricing and terms to help accommodate their exchange. Back to square one.
They needed a tax- and income-friendly solution fast, before conditions at the property got worse.
Skip the big tax bill. With a long-term interest-only loan, they deferred capital gains taxes which allowed them to earn interest on the higher pre-tax loan amount.
Eliminate ownership hassles. Their new income stream was 100% passive and it eliminated all ownership expense, hassle, and liability.
Design their lifestyle. A 25-year installment term that gave them the cash flow they needed to live their retirement years on their terms.
The extra twist: We added an option for the Cruz’s to call some or all of the note due, at their discretion, so they had access to their cash on-demand if their situation changed.
The Cruz’s unlocked money, time, and freedom to retire.
“We got everything on our wishlist and it was fast and easy.” - Sam Cruz
The Cruz’s thought Flexible was “too good to be true”, but got an offer, did the math, and were confident in their choice.