Trying to avoid my Uncle Sam in California
Hello BP,
Sorry for being long (type) winded . I've been a lurker on the forums for the last six month or so. I like to say I've been a landlord for the last 13 years and want to take it to an investment level. I differentiate the two as a landlord treads water in a stationary location and an investor does the backstroke in real estate.
Over the next year I intend to going from 2-3 rentals over the last 13 years to scaling up and treating it as a business. I've decided to sell my properties in Norther Cal and reinvest in more common sense markets to get more bang for my buck. My question for now is for the 1031 experts. I've reviewed the basic rules for 1031 (like kind, must be through QI, 45 day ID, and 180 max escrow). I'm also aware of the 3 property, 200%, + 3 property 90% close rules.
My question is this. If you are trying to leverage as much as possible, I.E. 1031ing a sfr rental into multiple properties, how would one avoid deals falling through with the 45 day rule? With enough equity to 1031 for one into 6-7 single families, or 2-3 small mfr buildings, the last thing I want is to end up paying capital gains because a property(s) falls through.
I was thinking one technique may be to start the search early and getting the replacement properties under contract with sale of current property contingencies so that I don't feel the pressure to buy a bad deal. The problem with that is I know is there are some sellers who want to move their properties asap.
I was also thinking that 1031ing into turnkey provider properties may be a logistically easier option, but since I want to treat my real estate investing as a small business, I'm adverse to there being a middle man agency. Trying to see if I'm on the right track. Thanks in advance for any responses.