1031ing into a property that needs some rehab

[Daria B.]

Hi

After finding this as one of the alternative 1031s on @Dave Foster pdf overview I am thinking it’s a strategy I can look to rather than finding a ready-2-rent property to buy.

“Improvement Exchanges allow you to purchase properties needing improvement and complete the value­ add repairs using your 1031 exchange proceeds.”

Then I found this that James Boreno posted: https://www.biggerpockets.com/forums/104/topics/1165299-how-...

I’m interested in the part where he 1031 is property and bought something that needed repairs so his out of pocket - after purchase - allowed him to rehab the property.

Is this is a viable strategy often used rather than buying all ready properties that require no work? I’ve seen a few around town that would be purchase candidates with some out of pocket after purchase work that’s needed. 
 
I realize the net sale going into the exchange property needs to be at same amount or if below (cap gain tax will be on sale $ not used for purchase).

Cheers!

[Daria B.]

Quote from @Alex Olson:

Having rehab funds as part of your 1031 exchange is a part of most of my clients transactions here in KC. You have to have a quality QI and lender to help guide you on how best to do this. @Dave Foster is an exceptional QI and it would depend what market you will exchange in to to find a lender that is solid. 

Yes, Dave and I have already spoken about 1031. This was not one of the things we discussed though and was hoping to hear from investors who did this in a 1031 and how they managed to pull it off.