Skip to content
1031 Exchanges

User Stats

51
Posts
40
Votes
Bette Hochberger
Tax & Financial Services
  • Accountant
  • 33301
40
Votes |
51
Posts

Identifying Replacement Properties in 1031 Exchanges

Bette Hochberger
Tax & Financial Services
  • Accountant
  • 33301
Posted Nov 21 2023, 08:22

What strategies do you use to identify and secure suitable replacement properties within the 45-day window in a 1031 exchange? Let's get a discussion going below!

And as a CPA specializing in Real Estate... I'm here to help!

User Stats

5,037
Posts
4,668
Votes
Taylor L.
Pro Member
  • Rental Property Investor
  • RVA
4,668
Votes |
5,037
Posts
Taylor L.
Pro Member
  • Rental Property Investor
  • RVA
Replied Nov 21 2023, 08:31

Start looking way before the 45 day window starts. We do deals with 1031 Exchangors who take TIC positions, and I've found that a huge, huge key to success is to set the pins up as early as possible.

The downside is that if the sale of the relinquished property slides, that impacts one's ability to get into a particular replacement deal.

User Stats

441
Posts
274
Votes
Carini Rochester
  • Investor
  • Rochester, NY
274
Votes |
441
Posts
Carini Rochester
  • Investor
  • Rochester, NY
Replied Nov 21 2023, 11:40

I use the church foyer. I start conversations and try to be caring and friendly. I bought two buildings this year through a guy I met at church. I sold my worst performing property (low return on equity) and 1031 into two down payments. And . . . owner financed!

Rent To Retirement logo
Rent To Retirement
|
Sponsored
Turnkey Rentals 12+ States. SFR, MF & New Builds, High ROI! 3.99% rates, 5% down loans, below market prices across the US! Txt REI to 33777

User Stats

99
Posts
85
Votes
Brandon Bruckman
  • Financial Advisor
  • Milwaukee, WI
85
Votes |
99
Posts
Brandon Bruckman
  • Financial Advisor
  • Milwaukee, WI
Replied Nov 21 2023, 12:00

What @Taylor L. said.  You have to start making plans for replacement property well before you sell.  Using TICs or DSTs as backup is a good plan too.  If you can put three properties on the sheet, do that. 

User Stats

159
Posts
117
Votes
Lauren Speidel
Pro Member
  • Qualified Intermediary for 1031 Exchanges
  • Chicago, IL
117
Votes |
159
Posts
Lauren Speidel
Pro Member
  • Qualified Intermediary for 1031 Exchanges
  • Chicago, IL
Replied Nov 22 2023, 07:27

@Bette Hochberger I usually tell my clients to use their escrow period to narrow down a location and even possibly a property. Being prepared is key. Unfortunately, I do have clients that come to me at the last minute to set up their exchange. Let's say they had a 30- or 45-day escrow period before closing, they could have been using that time to help them narrow down their replacement(s). You can go put in an offer, sign a contract and put down earnest money even before the relinquished property closes. If the client is trying to execute a forward exchange, they will just want to make sure their current property can close prior to the purchase of the replacement. 

As others have stated, if you do have a client nearing their 45th day and they haven't found a replacement and still want to defer the tax they could look at a passive investment like a TIC or DST.

User Stats

190
Posts
86
Votes
Ecaterina Katerina Morosan
  • Real Estate Agent
  • Miami, FL
86
Votes |
190
Posts
Ecaterina Katerina Morosan
  • Real Estate Agent
  • Miami, FL
Replied Nov 22 2023, 10:58

Bette, PMing you know. Let's exchange contact info

User Stats

8,634
Posts
8,959
Votes
Dave Foster
Pro Member
#1 1031 Exchanges Contributor
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
8,959
Votes |
8,634
Posts
Dave Foster
Pro Member
#1 1031 Exchanges Contributor
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
Replied Nov 27 2023, 10:35

And you use that church foyer well @Carini Rochester!!

User Stats

24
Posts
15
Votes
Michael Lynch
Pro Member
  • Professional
  • Millbrae, CA
15
Votes |
24
Posts
Michael Lynch
Pro Member
  • Professional
  • Millbrae, CA
Replied Jan 17 2024, 12:35
Quote from @Carini Rochester:

I use the church foyer. I start conversations and try to be caring and friendly. I bought two buildings this year through a guy I met at church. I sold my worst performing property (low return on equity) and 1031 into two down payments. And . . . owner financed!


 Boot issues?

User Stats

441
Posts
274
Votes
Carini Rochester
  • Investor
  • Rochester, NY
274
Votes |
441
Posts
Carini Rochester
  • Investor
  • Rochester, NY
Replied Jan 17 2024, 13:17

@Michael Lynch Not at all. The replacement properties were of greater value and all of the money received from the sale went into the purchase. Is that what you're asking?

User Stats

17
Posts
4
Votes
Ryan Beatty
  • Investor
  • Calabasas, CA
4
Votes |
17
Posts
Ryan Beatty
  • Investor
  • Calabasas, CA
Replied Jan 23 2024, 12:49

Folks in my network usually notify me they plan to sell and I can pretty quickly get them a cash flowing assisted living community to exchange into nearly same day. It's nice having a large portfolio of these communities.