Planning before or after

[Ash Patel]

In Feb of 2016, I would like to sell 1-3 commercial properties and 1031 them into 1 or more properties.  With only 45 days to identify the next prospects, do most people already have these lined up prior to their 1031 sale?  I know you have 180 days to close but that 45 day identification period seems tight.  

I guess in reality you have the 30-45 days from the time your sell contract is signed till close.  That buys you some time.  Again just curious if people have things inline before their sale.

Thanks - Ash

[Dave Foster]

@Ash Patel  It's very common to go shopping and even go into contract on your replacement properties before you close on your sales.  You've correctly identified the crunch issues of the 45 day window.  But remember that contracts can overlap in any way.  Only the closing of the sale must precede the closing of the purchase.

A couple of things you can do to extend your window.

1. Contingency contracts or 1031 cooperation contracts on either sale or purchase that give you some freedom.

2. Start shopping as soon as you have a contract for sale and negotiate as long a closing of the sale as possible.

3. If you want to roll three properties into one large purchase you may want to consider a reverse exchange to make sure you buy exactly the right property and get some extra time to sell the old properties.