1031 Exchanges

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Garrett Hollenbach
  • Rental Property Investor
  • Salisbury, MD
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1031 Exchange a Rental into a 2nd Home?

Garrett Hollenbach
  • Rental Property Investor
  • Salisbury, MD
Posted May 23 2023, 06:55

Hello BP, 

I want to 1031 exchange a Long Term Rental Property into a Beach Condo. I want to buy the Beach Condo as a 2nd Home so I can get a lower down payment. Can I 1031 Exchange a Rental into a 2nd Home? 

Reason for Question: 

I have enough equity (without paying cap gain tax) in my rental for a 10% downpayment on a specific beach condo I want, but I don't have enough equity for a 20-25% downpayment on that same specific beach condo I want. If I simply sell my rental and pay cap gains tax, I will not have enough cash for a 10% downpayment on that beach condo I want. Hence my question above. 

Thanks 

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