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1031 exchange into an existing property, then tear down later to build
Hi BP - Lets say you were able to successfully 1031 into another deal and it's a single family rental in a great neighborhood. The house is ok as a rental for now but the highest and best use is to tear it down and build new. You would keep the house for at least a year as a rental and then do the new build. Once the new build is complete, you'd rent that out for a year and sell (do another 1031). Is this possible in this kind of scenario with 1031? I understand the 180 day rule but I'm not sure that would apply in this scenario. Thanks!
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#1 Foreclosures Contributor
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@Mo Karim Yes. The 180 day rule is simply the Maximum amount of time to buy after selling with a 1031. You could tear the house down the day after you buy….as long as your Initial purchase price on the replacement property met the guidelines…equal or higher price than the property you sold and you use All the cash from the sale toward the new purchase.