How to WIN the Property While Using a 1031

Buyer Advice: How to use a 1031 and still win the house

Author: Heather Connor, Crested Butte Local Lifestyle Agent

A lot of my clients are asking the same questions over and over again, we will cover some of these questions.

Question of the week.

An Investor question regarding the purchase of a property using the 1031 Exchange with Contingency, which he needs to sell his previous property first so that he can then purchase the Replacement property. In such a competitive market, anybody that has a contingency is losing. That being said, the Reverse 1031 Exchange is the solution if you want to win the property. 

4 types of 1031 Exchange

The Reverse 1031 Exchange – it is the 1031 Exchange but in “Reverse”. What happens is you can purchase your Replacement property first and then once you close, you have 45 days to find 3 Relinquished properties which then you have 6 months to close that deal. Once you close the Relinquished property, your Qualified Intermediary will take care of all of the paperworks and your taxes are deferred. This tool gives you the leverage to enter the market just like any other competitive buyer. 

Using this tool however also has negatives, and one of it is that you need to Financially be able to afford this. You need to be able to financially cover the purchase of the replacement property without using the funds from the sale of the previous property. Another negative is that it will be more expensive for the QI (Qualified Intermediary) to perform the Reverse 1031 Exchange, that is because there are additional steps to complete the process successfully on your behalf. 

If you have specific questions, and if there’s any way I can help, just send me a DM.

 

Schedule a Call with Heather

If you’re considering a move, schedule a 15 minute call with Heather to strategize before the process

Are you getting our Daily Insider Emails?

Mindful Tidbits for Thought Leaders Everywhere