Can I use 1031 Exchanges funds as a down payment on Owner finance
Here is the scenario; I want to purchase 60 acres of land for $300,000 ($5000 per acre) and have an owner who will carry the financing. It is possible to sub divide off one lot and I already have a buyer who will pay $100,000 ($20,000 an acre) for the 5 acre lot. The current owner is agreeable with this plan if it works. Can I purchase the sub-divided 5 acre lot for $25,000 ($5000 per acre), and once closed, immediately resell it to my buyer for $100,000 ($20,000 per acre) using a 1031 exchange. The $100,000 would go immediately (through the 1031 exchange) to the owner (who is offering owner financing) as a down payment on the remaining 55 acres. Does this work to defer the capital gains on the $75,000 gain?