Hornstein Fetter February 2018 Market Insight
How My Client’s View of a 1031 Exchange Changed Mine
by Scott Fetter
The 1031 Exchange is a tremendous resource to real estate investors and is a core element of our industry’s vitality. But that doesn’t mean that every investor who completes an exchange loves their new property as much as they did their old one. We often have to address that very concern before a transaction takes place. In discussing this recently, one of our most successful clients shared with me a perspective that really stuck with me, and I think it’s worth sharing.
Although not verbatim, her comment was this: “I’ve done a lot of exchanges in my investment career and I have definitely found myself more than once buying property to complete an exchange that I didn’t love or that I wouldn’t have bought If I weren’t in the exchange. While that was never easy to accept, I have to say that, looking back at my career, I am so glad that I bought those properties because they forced me to stay in the market. As a result, I have a portfolio today that is so much bigger and more valuable than I ever could have had if I didn’t push myself to occasionally close an exchange with a property I didn’t love.”
We would never advocate for any of our clients to buy a deal they didn’t love. But her message is important because she is evidence that growth doesn’t always look the way you expect it to, but it’s still growth nevertheless.
1031 Exchange Client Testimonial
by Jeff K.
I’ve been buying and selling properties with the help of the Hornstein Fetter Team for quite a few years now. Together we’ve completed numerous 1031 and Reverse 1031 Exchanges. They have all been incredibly successful. The results of the latest one are beyond my wildest expectations. Within three years, the original property was exchanged for a much larger, better class of property, with a much better unit mix. After a rather large owner distribution was made, the transaction resulted in an annual cash on cash return in excess of 100% and a total annual return of over 200%, calculated on the remaining original equity. Without a doubt, I highly recommend the Hornstein Fetter Team.