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November 13, 2020

The Money-Saving Power of the 1031 Exchange, with Dave Foster

Episode 217:

Dave Foster is the Founder and CEO of The 1031 Investor. Dave is a degreed accountant and serial real estate investor who is a qualified intermediary and consultant for tax saving strategies such as the 1031 exchange and the section 121 homestead exemption. Dave started fix and flipping in the 90s and realized that about 40% of his profits were going directly to the IRS. Dave tells us about the updated rules and regulations around using the 1031 exchange to legally compound your tax interest that will stay with you instead of going straight to the government. Dave breaks down exactly how to use the 1031 exchange in layman’s terms. He explains to us how he moved his way from Denver, CO to Tampa, FL over 10 years using the section 121 homestead exemption, so that he and his family could move onto a boat (which was a huge dream of his). Tune in to listen to how Dave raised 4 boys on his boat while investing in properties with the 1031 exchange.

What you’ll learn about in this episode:

  • How paying more in taxes on his early investments than he made in profits lit a fire under Dave and inspired him to find a way to keep more of his money
  • How Dave discovered the 1031 exchange rules, and how that became the vehicle he used to achieve his financial goals and dream of moving his family onto a boat
  • What a 1031 exchange is, and how real estate investors can take advantage of these rules to avoid taxes on their investment profits
  • Why it is critically important to speak with a Qualified Intermediary (QI) and set up your 1031 exchange before you close on a property sale
  • How Dave created The 1031 Investor as a means of teaching real estate investors everything they need to know to take advantage of 1031 tax savings
  • How every state except Pennsylvania honors the 1031 exchange at the state level, and what to look for in a good, ethical QI
  • What benefits you can receive from using a 1031 exchange to grow your wealth, and how to take advantage of value appreciation
  • Why it is important to learn from people who have weathered difficult times, and why Dave believes in testing people’s knowledge and performance
  • Why the “four D’s” of 1031 exchange, “defer, defer, defer, die”, are the key to avoiding taxes on your investment income

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