Understanding your options

1031 Exchanges, DSTs, Installment Sales, and Lifestyle Transitions

If you’ve owned your multifamily property for 20–30 years, you’ve likely built significant equity — but you may also be facing issues like full depreciation, increasing maintenance, or rising management fatigue. The good news is that you have more options than most owners realize. The key is understanding each path and how it aligns with your income, lifestyle, and tax goals.

Option 1
The 1031 Exchange — Keep More of Your Money Working

A 1031 Exchange allows you to sell your investment property and reinvest into another “like-kind” asset without paying capital gains taxes immediately. This preserves your entire equity and gives you the ability to upgrade or downsize into a more suitable asset.

Owners often exchange into:

  • Newer rentals requiring fewer repairs
  • NNN-leased commercial buildings
  • Smaller, easier-to-manage rentals
  • Managed vacation rentals

Option 2
DSTs — Passive Income Without Tenants

A Delaware Statutory Trust lets you own fractional interests in large commercial assets, with:

  • Monthly passive income
  • No tenant responsibilities
  • Professional management
  • 1031 exchange eligibility

Option 3
Installment Sales — Be the Bank

You collect monthly payments with interest while spreading capital gains taxes over several years, which can provide predictable income.

Option 4
Lifestyle Investing — Vacation Property You Can Rent to Family

Through a properly structured 1031 exchange, you can acquire a vacation property you may short term rent (VRBO) to guests, and even rent to family at below market rate and enjoy personally for a limited number of days, while generating income.

Each strategy can be aligned with your long-term goals, whether that’s retirement, travel, estate simplification, or passive income.

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Kurt Parkinson

Senior Vice President, Commercial Development

916.798.4214
kurt.parkinson@goparkinson.com
goparkinson.com
CalRE#: 01517516

Coldwell Banker Commercial Kurt Parkinson Norther CA
Coldwell Banker Commercial Kurt Parkinson Norther CA

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