Many of our clients are entering the “fourth quarter” of their real estate journey. Their properties have generated solid cash flow and long-term appreciation, creating real wealth. But ownership comes with constant demands. Tenants, maintenance, rising costs, and unexpected issues never go away. An increasingly hostile regulatory environment is also prompting more housing providers to consider an exit. Unlike a traditional job, you can’t just retire from owning property. You either sell or pass it on, and both come with complications.
A well-crafted exit plan is essential. This usually means working with an estate attorney, financial advisor, and accountant. In many cases, passing property to heirs isn’t realistic. They may not have the time, interest, or expertise to manage it. That leaves selling, which presents its own challenges. Real estate is illiquid, and selling often triggers significant capital gains taxes that can erode decades of investments and savings. It can also push sellers into higher tax brackets, affecting Medicare premiums and other benefits.
At Compass Commercial, we partner with clients and their advisors to create exit strategies that align with personal goals. Some key tools include:
Seller Financing (Installment Sale)
The seller finances the deal, receiving a down payment and a note. This spreads tax liability over time and provides ongoing income, which is ideal for certain investors.
Single-Tenant NNN Leased Properties
Via a 1031 exchange, investors can roll proceeds into hands-off assets leased to national tenants (like Walgreens or Starbucks). It offers stable income with little to no management.
Delaware Statutory Trusts (DSTs)
Another 1031 option, DSTs let investors buy fractional interests in institutional-grade properties. This gives diversification and professional management, a great option for passive investors.
721 Exchanges
Here, owners contribute their properties in exchange for shares in larger portfolios, which may convert to REIT shares over time—offering liquidity and diversification while deferring taxes.
Opportunity Funds
Investing capital gains into Opportunity Zones allows for tax deferral, potential gain reductions, and zero taxes on new appreciation if held 10+ years.
Every investor’s situation is different. At Compass Commercial, we focus on understanding your goals and building a custom plan that helps you retire from active real estate ownership, on your terms. Contact us today if you are considering a real estate exit.
The Compass Commercial Multifamily Brokerage Team specializes in Central Oregon multifamily properties of all sizes and types from duplexes to 200+ units. Contact us today for a free Broker Opinion of Value on your property.