Once upon a time, there were five property owners, they each owned and managed five different single family rental properties.

One day, they had an idea that would change their financial futures forever.

They decided to use the 721 Exchange to pool all their single-family rentals together, into one Real Estate Investment Trust (REIT). 

They knew that by pooling their resources together, each of them could avoid paying the capital gains taxes on their properties, create a diversified portfolio of real estate assets that would provide steady income and potential capital appreciation. 

They saw many advantages for pooling their properties together into one REIT:

Professional management:. The REIT had professional managers who were experts in the real estate industry. They had the experience and knowledge to manage all aspects of single family rentals, from leasing, insurance to maintenance and repairs.

Scale: When all the properties are in one portfolio, it gave each unit owner economies of scale. This allowed them to negotiate better deals with tenants and suppliers, and it also gave them the combined resources to attract other property owners to also pool their properties into the REIT.

Diversification: When single family rentals from different locations are pooled together, it diversifies the entire portfolio and reduce investment risk for each unit owner.

Income potential: A large portfolio of income producing properties will also provide each unit owner with a steady stream of income throughout their lifetime. 

Over time, the REIT grew in the amount of unit owners and additional properties, generating consistent rental income and increasing the value of the portfolio. Each unit owners was thrilled because they no longer had the stress of dealing with tenants, dealing with contractors, and property management companies. And they all felt like financial geniuses when they saw that their ownership in the REIT grew in value and provide financial security for themselves and their families.

And they all lived happily ever after.