REAL ESTATE COLLECTIVE GROUP

1031 Exchange Distributions and Timeline

Explore the two distribution options and the three stages of an affordable housing exchange.

EXPECTED DURATIONApproximately 36 months

PREFERRED RETURN10% annualizedNon-compounded; paid annually or deferred.*

DISTRIBUTIONS

Choose when to receive returns.

While projects are in pre-development, they typically do not generate taxable income. The strategy describes two distribution options.

OPTION 01

Current distributions

You Receive:

Distributions during the exchange period
These are considered Return of Capital
Not taxable when received

Tax treatment described in the strategy

Reduces your tax basis (your exchange value)
At exit (property sale), total interest received is treated as taxable gain
Gain can be deferred again by reinvesting in a new 1031 exchange

OPTION 02

Deferred distributions

You Wait:

No distributions during the exchange period
You receive a lump sum at the end: your original exchange plus total deferred interest

Tax treatment described in the strategy

Deferred interest is taxable again
Like scenario 1, it can be deferred if reinvested in a new 1031 exchange

THE PROCESS

From acquisition to exit.

Exchange structure

Your tax-deferred capital gain is invested alongside CRP Affordable in select affordable housing development sites.
1031 exchangers have cash flow priority ahead of the CRP Affordable Fund.

Use of funds

Acquire development sites.
Fund initial (predevelopment) project costs such as application fees, architectural services, and engineering studies.

LIHTC partnership

Once the project secures tax credits and financing, CRP Affordable will partner with a LIHTC exchanger who will provide the equity financing.
CRP Affordable and the exchangers exit the exchange.

View the distribution illustration

WHAT COMES NEXT

Your next exchange.

CRP Affordable will seek new exchanges as each exchange cycle is completed. Exchangers can also choose not to participate in subsequent opportunities.

* Preferred return described in the strategy: 10% annualized, non-compounded, paid annually or deferred into the next 1031 exchange.

TAKE A CLOSER LOOK

Explore the strategy.
Discover the opportunities.

The 1031 Affordable Strategy Guide