1031ing several single famlies into a multifamily, can you do that?

Question

1031ing, is that even a word? Here is my question: I have several single family homes that I am selling and I want to 1031 them into a multifamily deal, what does that look like? I'm still trying to educate myself on multifamily and dont think I will be ready by the time all single family units sell, so what do I do? Should I talk to a professional here in the Houston area to get some advice, or is my plan not possible? Thanks!

Bill Exeter · Answer

Hi Chris,

Yes, this can be accomplished through a 1031 Exchange transaction. You can absolutely sell one or more relinquished properties and exchange into one or more replacement properties. The more properties involved in the transaction the more complex the 1031 Exchange becomes. The closing of the first sale will trigger your 45 calendar day identification period and your 180 calendar day exchange period.

It is also possible to start off with a regular Forward 1031 Exchange (sell SFRs first, buy multi-family later) and combine or end with a Reverse 1031 Exchange if not all of your SFRs have sold by the time you must acquire your replacement property. This gets more complicated, but we do them all the time.

Danny Simard · Answer

Great question, thanks for asking! I was wondering the same thing a few weeks ago.

Kim Rock · Answer

Yes you can do this! I've had clients do it. Definitely talk to a 1031 specialist in your area to go over the details though.

1031ing several single famlies into a multifamily, can you do that?

1031ing several single famlies into a multifamily, can you do that?

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