Property Investor's Network (Toledo, OH)

 

If you’ve ever sold a rental property and then looked at your tax bill… you know the pain.
Capital gains taxes can eat a big chunk of your profits — money that could’ve gone toward your next deal.

But what if you could legally defer paying those taxes and use that money to level up into a better property? That’s exactly what a 1031 Exchange allows you to do.

Let’s break it down in plain language.

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🤔 What is a 1031 Exchange?

A 1031 Exchange (named after Section 1031 of the IRS tax code) is a tool real estate investors can use to defer paying capital gains taxes when they sell an investment property — as long as they use the money to buy another similar investment.

It’s like a tax code loophole — except it’s not a loophole. It’s been around for decades and is 100% legit if done correctly.

In simple terms:
You sell a prop
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If you’ve been around the real estate investing world for more than five minutes, chances are you’ve heard someone mention the “BRRRR Method.” No, it’s not about being cold — it’s actually one of the most popular ways investors grow their rental portfolios without constantly needing more cash.

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat, and it’s a smart strategy for building long-term wealth. Let’s break it down step by step in plain English.

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🏡 Step 1: Buy

The first move is finding the right property — usually something that’s a bit rough around the edges. Maybe it needs some cosmetic work, or maybe it's been neglected for a while. Either way, you want to buy it below market value so you’ve got some room to add value.

Quick tip:
The numbers need to work. A good rule of thumb is the 70% Rule — buy for no more than 70% of the after-repair value (minus repairs). If the ARV is $200K and you need $30K in rehab, try to get it for around $110K or less.

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