Roll into the fund
Keep more of what you built.
A 721 exchange lets you trade your park for fund units instead of selling for cash. When it fits, you can defer the tax, stay invested, and go passive. Here is the plain-English version.
What is a 721 exchange?
A 721 exchange, sometimes called an UPREIT, lets a property owner contribute real estate to a partnership in exchange for partnership units. Because you receive units instead of cash, the IRS generally treats it as a non-taxable event under Section 721. The gain you would owe on a straight sale is generally deferred.
For a mobile home park owner, that means two of the biggest costs of selling, capital gains tax and depreciation recapture, are pushed down the road instead of paid up front. Your equity keeps working for you.
Cash sale vs. rolling into the fund
| Consideration | Straight cash sale | Roll into the fund (721) |
|---|---|---|
| Capital gains tax | Due now | Deferred |
| Depreciation recapture | Due now | Deferred |
| Ongoing income | Ends at sale | Passive, if distributed |
| Diversification | Up to you to rebuild | Built into the portfolio |
| Management burden | Gone | Gone |
Prefer cash or a note? Those options are always on the table. The fund is for owners who want to defer the tax and stay invested.
How the exchange works
You contribute your park
Instead of selling for cash, you contribute the property to our fund.
You receive fund units
In return you get operating partnership units, valued at your park’s agreed contribution value.
The tax is generally deferred
Under Section 721, a properly structured exchange is generally not a taxable event, so capital gains and depreciation recapture are deferred rather than paid now.
You go passive
You hold units in a diversified portfolio and go fully passive. No tenants, no repairs, no management.
See if the 721 fits your park
Tell us about the community and we’ll model cash, note, and fund scenarios side by side.