--- title: Benefits of Building a Real Estate Portfolio description: Critical exchange deadlines for your 1031 exchange. image: https://blog.fgg1031.com/hubfs/RE%20Portfolio.png --- [info@firstguardiangroup.com](mailto:) [(866)398-1031](tel:(866)398-1031) [![fgg](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2022/fgg.png)](https://brokercheck.finra.org/individual/summary/6470002) [![fgg-871923](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2023/fgg-871923.png)](https://www.bbb.org/us/ca/san-jose/profile/commercial-real-estate/first-guardian-group-1216-887513) [![logo](https://blog.fgg1031.com/hs-fs/hubfs/FirstGuardianGroup_2022/logo.png?width=175&height=56&name=logo.png "logo")](http://fgg1031.com) - [Home](https://fgg1031.com/) - [About Us](https://fgg1031.com/about-us/) - [Current Offerings](https://fgg1031.com/property-listings-directory/) - [Resource Center](https://fgg1031.com/resource-center/) - [Glossary](https://fgg1031.com/glossary/) - [Accommodators](https://fgg1031.com/accommodators/) - [FAQ](https://fgg1031.com/faqs/) - [Tax eBook](https://pages.fgg1031.com/resources/real-estate-tax-deferral-strategies-ebook) - [Real Estate eBook](https://pages.fgg1031.com/real-estate-investing-in-the-new-era2) - [QI eBook](https://pages.fgg1031.com/resources/qualifiedintermediary/ebook) - [Tax Calculator](https://fgg1031.com/tax-calculator/) - [Newsroom](https://fgg1031.com/newsroom/) - [Blog](https://blog.fgg1031.com/blog) - [Events](https://fgg1031.com/events/) - [Contact Us](https://fgg1031.com/contact/) ![search-interface-symbol](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2022/search-interface-symbol.png) ![loader](https://f.hubspotusercontent-eu1.net/hubfs/24949188/Business%20and%20Finance/global/22.gif) ![close](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2022/close.png) From Pages From Blog Pages Load More Load More **Sorry, we couldn't find a match for  "".** Check your spelling or try a related search term. [![Register](https://no-cache.hubspot.com/cta/default/5468919/d02a3ee4-7db2-4d64-b925-a6ebbfe26664.png)](https://cta-redirect.hubspot.com/cta/redirect/5468919/d02a3ee4-7db2-4d64-b925-a6ebbfe26664) ![blog-template-banner](https://blog.fgg1031.com/hs-fs/hubfs/Blog%20Banner/blog-template-banner.png?width=1920&name=blog-template-banner.png "blog-template-banner") # Blog ### Subscribe to Our Blog ### Subscribe to Email Updates ## Featured Post   [Paul Getty](https://blog.fgg1031.com/blog/author/paul-getty) ## [721 UPREIT Options in DST Programs (Part 3)](https://blog.fgg1031.com/blog/721-upreit-options-in-dst-programs) We have previously written two blog posts on 721 UPREIT options which discuss basic concepts which I encourage readers to review prior to reading this b\[...\] [Real Estate Investors](https://blog.fgg1031.com/blog/topic/real-estate-investors) [DST](https://blog.fgg1031.com/blog/topic/dst) [721 Exchange](https://blog.fgg1031.com/blog/topic/721-exchange) [UPREIT](https://blog.fgg1031.com/blog/topic/upreit) [Read More](https://blog.fgg1031.com/blog/721-upreit-options-in-dst-programs) ## Recent Posts [1031 Exchange](https://blog.fgg1031.com/blog/topic/1031-exchange) # Benefits of Building a Real Estate Portfolio By [Paul Getty](https://blog.fgg1031.com/blog/author/paul-getty) The combination of ongoing uncertainty in the stock market and the real estate market’s steady long-term appreciation has made real property an attractive option for investors looking for opportunities to diversify and grow their portfolios. The following guide provides a look at five potential benefits that may come from adding real estate to your portfolio. #### **1. Cash Flow** Investing in rental properties can be an effective way to create passive income. Ideally, your rental income may offset some or all of the expenses involved in owning the property and provide a profit. The term “cash flow” refers to the net income left over after paying a property’s mortgage, taxes, and operating expenses. This amount often rises as your mortgage is paid down, increasing the likelihood that you will see a positive return on your investment when the property is sold. #### **2. Tax Advantages** Owning real property creates several potential tax advantages. It’s often possible to deduct reasonable costs associated with owning, managing, and operating investment properties. Other common property-related tax deductions include depreciation, interest, and business-related expenses such as necessary travel or a home office. When it’s time to sell your investment property, you may also be able to defer your capital gains taxes and depreciation recapture by engaging in a 1031 exchange. #### **3. Inflation Hedge** Unlike many other types of investments, the value of real property tends to move in the same direction as inflation. When inflation starts to rise, typically, so do property values and rents. In addition to providing portfolio diversification, this can also serve as an inflation hedge, helping to protect your buying power. #### **4. Appreciation** Real estate values generally tend to increase over time as rents increase and produce greater net operating income.  Positive rent growth can make real estate a potentially profitable long-term investment. #### **5. Leverage** Many investment properties are purchased using leverage, allowing you to add an asset to your portfolio without having to pay the entire purchase price upfront. Borrowing capital may increase your investment’s return, and interest expenses can also lower your taxable income. Since the property is used as collateral, financing is typically readily available for qualified buyers.  #### Explore Your Options While these are some of the most common advantages of holding real estate in an investment portfolio, there are potentially many more. If you’re thinking about purchasing investment real estate, [contact us](https://fgg1031.com/contact/) to schedule a consultation. Our team has extensive experience in building real estate portfolios for clients and we would be pleased to assist you as you explore your options.   --- #### Have you downloaded our ebook? [![](https://no-cache.hubspot.com/cta/default/5468919/interactive-183026367788.png)](https://blog.fgg1031.com/hs/cta/wi/redirect?encryptedPayload=AVxigLIxVwjNSzUl43uBwmcEIj6glUC2Z6DJnhnfLEdns%2FL8npHUURJnEDcoCsp70KXkdQWs8EKNmWYJK4mSupqjxEyBdNgg4I4BGnirBeCw8XhTxdofnCTiWZpLJ2XfOW%2Bnw6HtAsKYILe1p633suqIQZSqB%2F5%2FdmyS2nYkGG4RYDuAkEakGKXExPJ%2BpajrEp0fvzG%2BDmVvrqSvTg8xYlf9gVdgIc3k5M1WTSnCuoKNxjvK&webInteractiveContentId=183026367788&portalId=5468919)   --- ##### **Help Save 1031 Exchanges** Write to your Member of Congress and Senators urging them to oppose restricting Section 1031 like-kind exchanges. As part of the American Families Plan, the Biden Administration has proposed eliminating the application of Section 1031 for gains greater than $500,000. Like-kind exchanges have been part of the U.S. tax code since 1921 and are one of the tax code’s most powerful economic tools. It is critical that we all vigorously and visibly oppose this proposal. Make your voice heard with a pre-filled letter, which you can customize to add personal anecdotes or powerful client stories to highlight the positive impact of Section 1031 like-kind exchanges. Take action today by clicking [HERE](https://p2a.co/XLBiUYT)[**.**](https://p2a.co/XLBiUYT) --- ### [Paul Getty](https://blog.fgg1031.com/blog/author/paul-getty) Paul M. Getty is one of the most experienced 1031 exchange specialists in the United States, with a career in real estate that spans over 35 years and more than $5 billion in commercial transactions across every major asset class. His work covers single-family rentals, apartments, retail, office, multifamily, and student and senior housing, giving him a practical understanding of how different property types perform across market cycles and how investors can move between them using tax-deferred exchange strategies. As President and CEO of FGG1031 | First Guardian Group, Paul advises investors through the full 1031 exchange process, from identifying qualifying replacement properties to structuring acquisitions through Delaware Statutory Trusts (DSTs) and wholly owned real estate. His guidance covers both the compliance requirements of a valid exchange and the investment decisions that determine long-term portfolio outcomes – a combination that is difficult to find in a single advisor. Paul holds a California and Texas real estate broker license and carries Series 22, 62, 63, and 82 securities licenses as a registered representative with Emerson Equity LLC, member FINRA /SIPC. He has represented buyers and sellers across complex commercial transactions, sourced and structured debt and equity, and worked alongside nationally recognized firms including Marcus Millichap, CBRE, JP Morgan, and Morgan Stanley. Before founding FGG1031, he co-founded Venture Navigation, a boutique investment banking firm whose M&A and IPO activity generated over $700 million in investor returns. Paul holds an MBA in Finance from the University of Michigan and a bachelor’s degree in chemistry from Wayne State University. He has also completed coursework in artificial intelligence at Stanford University. He is the author of four books on real estate investing and tax deferral strategy, including Tax Deferral Strategies Utilizing the Delaware Statutory Trust (DST) and Real Estate Investing in the New Era, both available on Amazon. A frequent speaker on 1031 exchanges, DST investing, and real estate tax strategy, Paul Getty is a recognized voice for investors and advisors seeking guidance on capital preservation through tax-deferred real estate investment. ## Your Comments : This is a search field with an auto-suggest feature attached. - There are no suggestions because the search field is empty. - Latest Posts - Popular Posts [Partial 1031 Exchange: How It Works, What Gets Taxed, and When It May Make Sense](https://blog.fgg1031.com/blog/partial-1031-exchange-how-it-works) [ 1031 Exchange](https://blog.fgg1031.com/blog/topic/1031-exchange) [721 UPREIT Options in DST Programs (Part 3)](https://blog.fgg1031.com/blog/721-upreit-options-in-dst-programs) [ Real Estate Investors](https://blog.fgg1031.com/blog/topic/real-estate-investors) [ DST](https://blog.fgg1031.com/blog/topic/dst) [ 721 Exchange](https://blog.fgg1031.com/blog/topic/721-exchange) [ UPREIT](https://blog.fgg1031.com/blog/topic/upreit) [ New featured](https://blog.fgg1031.com/blog/topic/new-featured) [Can a 9% Taxable Return Beat a 4.5% Tax Advantaged DST?](https://blog.fgg1031.com/blog/can-a-9-taxable-return-beat-a-4.5-tax-advantaged-dst) [ Real Estate Investors](https://blog.fgg1031.com/blog/topic/real-estate-investors) [ DST](https://blog.fgg1031.com/blog/topic/dst) [ New featured](https://blog.fgg1031.com/blog/topic/new-featured) ### Categories - [1031 Exchange (143)](https://blog.fgg1031.com/blog/tag/1031-exchange) - [DST (59)](https://blog.fgg1031.com/blog/tag/dst) - [Real Estate Investors (43)](https://blog.fgg1031.com/blog/tag/real-estate-investors) - [Blog (41)](https://blog.fgg1031.com/blog/tag/blog) - [New featured (36)](https://blog.fgg1031.com/blog/tag/new-featured) - [Taxes (18)](https://blog.fgg1031.com/blog/tag/taxes) - [Estate Planning (10)](https://blog.fgg1031.com/blog/tag/estate-planning) - [Investor (8)](https://blog.fgg1031.com/blog/tag/investor) - [REIT (7)](https://blog.fgg1031.com/blog/tag/reit) - [Capital Gains (6)](https://blog.fgg1031.com/blog/tag/capital-gains) - [Qualified Intermediary (6)](https://blog.fgg1031.com/blog/tag/qualified-intermediary) - [721 Exchange (4)](https://blog.fgg1031.com/blog/tag/721-exchange) - [Featured (4)](https://blog.fgg1031.com/blog/tag/featured) - [Opportunity Zones (4)](https://blog.fgg1031.com/blog/tag/opportunity-zones) - [1031 Exchange Funds (3)](https://blog.fgg1031.com/blog/tag/1031-exchange-funds) - [Inflation (3)](https://blog.fgg1031.com/blog/tag/inflation) - [Retirement Planning (3)](https://blog.fgg1031.com/blog/tag/retirement-planning) - [Reverse 1031 Exchange (3)](https://blog.fgg1031.com/blog/tag/reverse-1031-exchange) - [TIC (3)](https://blog.fgg1031.com/blog/tag/tic) - [Apartment Market (2)](https://blog.fgg1031.com/blog/tag/apartment-market) - [Boot (2)](https://blog.fgg1031.com/blog/tag/boot) - [CA Landlords (2)](https://blog.fgg1031.com/blog/tag/ca-landlords) - [Covid-19 (2)](https://blog.fgg1031.com/blog/tag/covid-19) - [Depreciation (2)](https://blog.fgg1031.com/blog/tag/depreciation) - [Depreciation Recapture (2)](https://blog.fgg1031.com/blog/tag/depreciation-recapture) - [IRS (2)](https://blog.fgg1031.com/blog/tag/irs) - [NNN (2)](https://blog.fgg1031.com/blog/tag/nnn) - [UPREIT (2)](https://blog.fgg1031.com/blog/tag/upreit) - [1033 Exchange (1)](https://blog.fgg1031.com/blog/tag/1033-exchange) - [1099A (1)](https://blog.fgg1031.com/blog/tag/1099a) - [AB1771 (1)](https://blog.fgg1031.com/blog/tag/ab1771) - [CPA (1)](https://blog.fgg1031.com/blog/tag/cpa) - [Cost Segregation (1)](https://blog.fgg1031.com/blog/tag/cost-segregation) - [Mortgage (1)](https://blog.fgg1031.com/blog/tag/mortgage) - [PPM (1)](https://blog.fgg1031.com/blog/tag/ppm) - [Rent Relief (1)](https://blog.fgg1031.com/blog/tag/rent-relief) - [Retail (1)](https://blog.fgg1031.com/blog/tag/retail) - [The Tax Cuts and Jobs Act (1)](https://blog.fgg1031.com/blog/tag/the-tax-cuts-and-jobs-act) see all ### Read more of what you like. ## [Partial 1031 Exchange: How It Works, What Gets Taxed, and When It May Make Sense](https://blog.fgg1031.com/blog/partial-1031-exchange-how-it-works) ## [Understanding Loan-to-Value (LTV) in DST 1031 Exchanges](https://blog.fgg1031.com/blog/understanding-loan-to-value) ## [How 1031 Exchange Proceeds and QI-Held Funds Are Taxed](https://blog.fgg1031.com/blog/how-1031-exchange-proceeds-and-qi-held-funds-are-taxed) [![FGG_Footer_White](https://blog.fgg1031.com/hs-fs/hubfs/FirstGuardianGroup_2022/FGG_Footer_White.png?width=300&height=95&name=FGG_Footer_White.png "FGG_Footer_White")](http://fgg1031.com) 97 East Brokaw Road, Suite 350, San Jose, CA 95112 [(866) 398 1031](tel:(866)%20398%201031) [info@firstguardiangroup.com](mailto:info@firstguardiangroup.com) ## Recent Blogs - [Investing in Senior Housing October 20, 2022](https://blog.fgg1031.com/blog/investing-in-senior-housing) - [A Closer Look at the 7 Deadly Sins October 20, 2022](https://blog.fgg1031.com/blog/a-closer-look-at-the-seven-deadly-sins) - [What is a Springing LLC? October 20, 2022](https://blog.fgg1031.com/blog/what-is-a-springing-llc) ## Useful Links - Home - About Us - Blogs - Testimonials from Past Customers - Resource Center - Current Offerings Disclaimer: There is no guarantee that any strategy will be successful or achieve investment objectives. All real estate investments have the potential to lose value during the life of the investments. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please be aware that this material cannot and does not replace the Memorandum and is qualified in its entirety by the Memorandum. This material is not intended as tax or legal advice so please do speak with your attorney and CPA prior to considering an investment. This material contains information that has been obtained from sources believed to be reliable. However, FGG1031, First Guardian Group, LightPath Capital, Inc., and their representatives do not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) and 1031 Exchange properties. These include, but are not limited to, tenant vacancies, declining market values, potential loss of entire investment principal. Past performance is not a guarantee of future results: potential cash flow, potential returns, and potential appreciation are not guaranteed in any way and adverse tax consequences can take effect.  The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. All financed real estate investments have a potential for foreclosure. Delaware Statutory Trust (DST) investments are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments. Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions. Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits. IRC Section 1031, IRC Section 1033, and IRC Section 721 are complex tax codes; therefore, you should consult your tax and legal professional for details regarding your situation. DST 1031 properties are only available to accredited investors (generally described as having a net worth of over one million dollars exclusive of primary residence) and accredited entities only (generally described as an entity owned entirely by accredited individuals and/or an entity with gross assets of greater than five million dollars). If you are unsure if you are an accredited investor and/or an accredited entity, please verify with your CPA and Attorney prior to considering an investment. Securities offered through registered representatives of [LightPath Capital, Inc.](http://www.lightpathcapital.com/) Member [FINRA](http://www.finra.org/) / [SIPC](https://www.sipc.org/). FGG1031, First Guardian Group, and LightPath Capital, Inc. are separate entities. Copyright 2022, All Rights Reserved, FGG1031 [![FGG_Footer_White](https://blog.fgg1031.com/hs-fs/hubfs/FirstGuardianGroup_2022/FGG_Footer_White.png?width=300&height=95&name=FGG_Footer_White.png "FGG_Footer_White")](http://fgg1031.com) 97 East Brokaw Road, Suite 350, San Jose, CA 95112 [(866) 398 1031](tel:(866)%20398%201031) [info@firstguardiangroup.com](mailto:) [![Bitmap](https://blog.fgg1031.com/hubfs/FirstGuardianGroup_2023/Bitmap.png)](https://brokercheck.finra.org/individual/summary/6470002) ## Recent Blogs - [Understanding the Difference Between Inheritance and Estate Tax August 3, 2023](https://blog.fgg1031.com/blog/understanding-the-difference-between-inheritance-and-estate-tax) - [Public or Private Real Estate? Your Investment Portfolio May Need Both July 27, 2023](https://blog.fgg1031.com/blog/public-or-private-real-estate-your-investment-portfolio-may-need-both) - [How to Use 1031 Exchange Funds to Improve Your Replacement Property July 20, 2023](https://blog.fgg1031.com/blog/how-to-use-1031-exchange-finds-to-improve-your-replacement-property) ## Useful Links - [Home](http://fgg1031.com/) - [About Us](https://fgg1031.com/about-us/) - [Blogs](https://blog.fgg1031.com/blog) - Testimonials from Past Customers - [Resource Center](https://fgg1031.com/resource-center/) - [Current Offerings](https://fgg1031.com/property-listings-directory/) FGG1031 | First Guardian Group and Emerson Equity LLC do not provide legal or tax advice. Securities offered through [Emerson Equity LLC](http://www.emersonequity.com/) Member [FINRA/SIPC](http://finra.org/) and MSRB registered. Emerson Equity LLC is unaffiliated with any entity herein. 1031 Risk Disclosure: - There is no guarantee that any strategy will be successful or achieve investment objectives; - Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments; - Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities; - Potential for foreclosure – All financed real estate investments have potential for foreclosure; ·Illiquidity – Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments; - Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions; - Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits No offer to buy or sell securities is being made. Such offers may only be made to qualified accredited investors via private placement memorandum. Risks detailed in a private placement memorandum should be carefully reviewed, understood and considered before making such an investment. Prospective strategies and products used in any tax advantaged investment planning should be reviewed independently with your tax and legal advisors. Changes to the tax code and other regulatory revisions could have a negative impact upon strategies developed and recommendations made. Past performance and/or forward looking statements are never an assurance of future results. Many of the investments offered will be only available to those investors meeting the definition of an Accredited Investor under SEC Rule 501(A) and offered as Regulation D private placement securities via a Private Placement Memorandum (“PPM”). Prospective investors must receive, read and understand all of the risks associated with buying private placement securities. Investments are not guaranteed or [FDIC](http://fdic.org/) insured and risks may include but are not limited to illiquidity, no guarantee of income or guarantee that all tax advantages or objectives will be met and complete loss of principal investment could occur. **Risk Disclosure:** Alternative investment products, including real estate investments, notes & debentures, hedge funds and private equity, involve a high degree of risk, often engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. There may be restrictions on transferring interests in any alternative investment. Alternative investment products often execute a substantial portion of their trades on non-U.S. exchanges. Investing in foreign markets may entail risks that differ from those associated with investments in U.S. markets. Additionally, alternative investments often entail commodity trading, which involves substantial risk of loss. NO OFFER OR SOLICITATION: The contents of this website: (i) do not constitute an offer of securities or a solicitation of an offer to buy of securities, and (ii) may not be relied upon in making an investment decision related to any investment offering by FGG1031 | First Guardian Group, Emerson Equity LLC, or any affiliate, or partner thereof. FGG1031 | First Guardian Group does not warrant the accuracy or completeness of the information contained herein. Copyright 2026, All Rights Reserved, FGG1031