Commercial real estate pros have ignored debt flow, the strategic timing of debt payoff, while focusing on cash flow and tax breaks. Neglecting it is now costing investors heavily. One expert built a nationwide firm specializing in debt-flow exit plans, arguing it's essential for rescuing failed deals and reducing taxes.
Most of us in commercial real estate, we've been taught it's all about cash flow, right? And of course we know about 1031s and we know about, you know, we want to defer tax, we know about cost segs and depreciation, we have some of that. But how much do we really dive into the timing of all of this and bringing these three together? Debt flow, we've taken for granted for a long time. Now we can't take it for granted. People who did, who took it for granted are getting crushed. And so it's really that, like, that pain. And Ray Dalio has a good quote, says, "Pain plus reflection equals progress." Like, give the clients the option. Like, if they don't want to use it, great, use the 1031. But if they want to use it and it can solve their problem, who are we not to to offer it. And so I now think it's financial 1031 or brokerage malpractice if you don't know and at least offer this to your clients because it can save a failed 1031, it can help people get out of debt, it can get diversification, get timing on their side. And I've been able to now focus exclusively on this and build a company across the country to help people with really any asset of any kind, building a capital gains tax exit plan.
