Selling a portfolio of 8 SFR
I am interested in selling a portfolio of 8 SFR in the Towson/Parkville area. All are rented (1 in turnover now) and all but one have been renovated.
I need to 1031 the properties. Any suggestions on how to proceed?
#3 1031 Exchanges Contributor
- 1031 Exchange Qualified Intermediary
- Denver, CO
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#3 1031 Exchanges Contributor
- 1031 Exchange Qualified Intermediary
- Denver, CO
To proceed with a 1031 on your portfolio of rentals, you need to partner with a Qualified Intermediary to act as your 1031 accommodator (the IRS requires this). My company, 1031X, is 31 years old and is a top-rated national 1031 firm. I'm happy to walk you through a free consultation.
Since you're selling 8 SFRs, this could break up into multiple distinct exchanges (most likely), but you have the option of combining multiple sales into single exchange purchases. You have to line up the timing and valuation properly.
Are you already listing these SFRs or have any of them under contract? Or are you simply in the preliminary stages right now?
#1 1031 Exchanges Contributor
- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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#1 1031 Exchanges Contributor
- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
@Michael Whiting, There are a couple of ways to do this depending on your desires and desired direction.
1. You could sell the portfolio in it's entirety to a buyer. this might require a discount over selling them as individuals. But it would make your transaction one exchange. And that would simplify the timing requirements of the 1031 exchange.
2. If you sell them as individuals you'll likely get a higher price but you will be then doing multiple 1031 exchanges. This doesn't necessarily hurt you as you can combine exchanges to purchase your replacement property if you were wanting to purchase something larger. Another reason to sell them as individuals would be if you were wanting to purchase smaller less expensive units. In that case the multiple exchanges with different timelines might help you maximize your search time for the perfect replacements.
You have to use an unrelated 3rd party called the qualified intermediary for the 1031 exchange. And they have to be in place prior to the closing of your sale. Other than that you use the exact same process and professionals as you normally would.
