1031 Agricultural Exchange

Patty owned a portion of Illinois farmland for 20 years along with her siblings. It was decided that they would sell the farmland, but Patty worried about replacing the income she had been receiving for all these years. Further, Patty and her husband always had a passive ownership in the farmland and very little professional real estate experience, making the management of real estate a daunting task.

Corcapa 1031 Solution:

When the farmland was under contract to be sold, we created a proposal of DSTs and TICs that would provide Patty and her family an income stream while also providing several elements of liquidity. Patty kept out several hundred thousand of her sale proceeds and paid tax on it to have some immediate liquidity. Two of the investments had liquidity opportunities during the holding period: one via an UpREIT strategy allowing her to sell shares after a certain period of time, and another providing a cash-out refinance so that she would have another several hundred thousand dollars to invest in non-real estate assets. We also purchased several DSTs such as multifamily in Phoenix, AZ and Atlanta, GA, a 55+ active living community, and no-debt self-storage facilities in North and South Carolina. The result is an entirely passive real estate portfolio replacing the agricultural land income.