203 - Legally Maximize Your Profits with Dave Foster

Tax-free. Now that I’ve got your attention, Dave Foster, the
founder and 1031 Exchange mastermind behind The 1031 Investor, is
a pro when it comes to leveraging tax codes to maximize your
investments and sell them tax-free. Whether it’s for investment
properties or even your primary residence as a real estate
professional (in Dave’s case, a boat for 10 years!), there are
ways to legally maximize your profits with every transaction.
Listen in to hear Dave’s strategy and investing advice — and
learn how it has worked for his family and clients.


Please subscribe to this podcast in iTunes or in the Podcasts App
on your phone, and never miss a beat from Leigh by visiting
leighbrown.com. If you’re tired of doing real estate alone,
enroll in  Leigh Brown University and be sure to use your
special “CSIRE” discount code at checkout for $10 off your
subscription.


01:30 – Introducing Dave, who got into real estate after
having his son and wanting to spend more time with family

02:10 - He and his wife didn’t want to sacrifice their
lives to a career; they got into the last real estate rush
before the crash and bought a property in Denver

02:55 - His accountant broke the news that, after taxes,
he actually didn’t make much profit for all the work; then he
learned about the 1031 exchange

03:30 - Now, for the past 20 years, he’s been doing them
for himself and others



05:30 – Dave’s CSIRE story

05:45 - He and his wife turned a real estate investing
career across four different markets into a sailboat that
they lived on for 10 years with all four of their boys

06:30 - They used investment money to pay for it and used
Section 121 for their primary residence

07:00 - On Section 121: If you live at a property that
you own for 2 out of 5 years, you can take the first $500,000
in profit tax-free

08:00 - You can use that once every two years; it’s not a
once-in-a-lifetime opportunity so you could take profit
tax-free 8-9 times over a lifetime

08:50 - You don’t have to keep your 1031 real estate as
investment real estate forever; he and his family combined
the 1031 and Section 121 to pocket the profit



10:40 – Another CSIRE story

10:50 - One of the homes they lived in was a set to a
movie called Reservation Road; then they went to Florida

13:00 - He has friends that are leveraging the 1031
Exchange and Section 121 to fund their retirement

13:55 - 1031 Exchanges require the use of an intermediary
and a QI to make sure everything aligns with the law; there
are regulatory hoops to pass

14:50 - Real estate that qualifies for 1031 Exchange must
be intended for use and to hold; Dave had a friend who wanted
to sell after a month

15:20 - He did intend to hold it, which was in a
contract, but the tenant moved out unexpectedly due to a bear
that moved in next to her trash can

17:25 - He did the 1031 Exchange and everything was fine;
the intention was there



17:50 – Dave’s piece of real estate investment advice

18:00 - You make money when you buy, and you keep your
money when you sell; as long as you own the property or sell
it into another 1031, you’ll never pay the tax

19:00 - When you die, it doesn’t matter how much tax you
have built up; your heirs get it as though they paid market
value for it so that tax goes away

19:22 - Buy it right, sell it right, and enjoy making
money for yourself and your heirs 



19:55 – How to get in contact with Dave: his website and go
here for a $50 coupon on your next 1031 Exchange deal



3 Key Points
Get educated on the 1031 Exchange.  Research Section 121
and see how you can leverage it! Don’t do something just because
you think you can get away with it but don’t not do something
because you’re afraid of getting questioned about it.