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Most contractors think selling a rental means getting crushed with capital gains taxes.

Most contractors think selling a rental means getting crushed with capital gains taxes.

Not necessarily.

There’s a strategy sophisticated investors use that most contractors either miss… or execute incorrectly:

➡️ 1031 Exchange + Refinance

Here’s the play:

• Sell your investment property• Roll proceeds into a new property (1031 exchange → defer taxes)• Then refinance later to pull cash out (loan proceeds = not taxable)

Done right, you keep your equity working and access liquidity.

Done wrong?

You trigger “boot” and hand the IRS a massive check.

The biggest mistakes I see contractors make:❌ Taking cash at closing❌ Refinancing too soon❌ Poor deal structuring

Timing and structure are everything here.

This is how investors scale portfolios, preserve capital, and build long-term tax-efficient wealth.

If you’re planning to sell or exchange a property this year, this needs to be mapped out before closing—not after.