Before the 1031 Exchange

Our client owned an investment property at 4882 Regents Park Lane in Fremont, CA, a 3 bed, 2 bath, 1,265 SF single-family home operating as a residential rental. Like most residential rentals, it came with the usual hands-on demands: ongoing maintenance, property taxes, insurance, and a tenant on a month-to-month lease with no long-term commitment.

After expenses, the property was generating $2,363 per month in net income, a modest return relative to the equity tied up in it.

Hanhan Commercial Group represented the client in the sale, locating a buyer and closing the transaction at $1,300,000.

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After The Exchange

With the proceeds from the sale, we helped the client execute a 1031 Exchange to defer capital gains tax and move into a low-maintenance, income-producing investment property. Hanhan Commercial Group identified a Single-Tenant Net Lease (STNL) opportunity with Big Brand Tires in Tucson, AZ, a national tire and automotive service operator with more than 170 locations nationwide.

The investment was purchased for $1,200,000 and included a 14-year lease (corporately guaranteed), with a 10% rent increase every 5 years, and zero landlord responsibility for taxes, insurance, or maintenance. The net monthly income upon purchase yielded $5,060.

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At A Glance

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