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Who is Interested in Zero Transactions?

A “Zero” is exactly what it sounds like; an investment that produces zero cash flow. So who is interested?

By Jonathan Hipp | Updated on November 17, 2010

Typically those interested in zero transactions fall into one of three categories: Distressed Owners, Highly Leveraged Sellers, and 1031 Buyers looking to maximize the amount of cash they refinance out shortly after closing on a transaction.

Distressed owners are entirely interested in burying their former basis into a 1031 exchange replacement property as a means to defer an otherwise crippling tax bill. Zero’s are typically priced at somewhere between 8%-10% of the debt load on the underlying property – making them a cost effective solution.  

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