I have 4 single family houses I want to sell to trade up to a multifamily. How can I coordinate this to take advantage of the 1031 exchange?
You can only trade out of one property but into multiple. The only way I see of doing this is opening an exchange for each of the 4 sf properties and buying a 25% TIC interest in the multifamily for each. I can't tag him for some reason, but try contacting Dave Foster to make sure that would work.
@Margaret Buoncora , If these are sold individually then each one of them constitutes a separate 1031 exchange with it's own unique timelines and reinvestment criteria. But you can combine 1031 exchanges into one larger purchase. That's not a problem as long as the timelines and reinvestment criteria are met.
1. You can sell them as a portfolio.
2. You can sell them all with a contingency for each that allows for closely bunched closings.
3. You can sell them all individually and coordinate your identifications and purchases so that they all sell within 180 days of the first sale, the closing of the purchase occurs within 180 days of the first sale, and that the identification of your potential replacements are consistent with the 45 day list of the first sale.
4. Or you can look at a reverse exchange where the QI forms a holding entity and takes title to the new property first. And then you sell your old properties.
Each one of these has pros and cons. It is a sellers market so using the power of being the seller can help you immensely in coordinating.
Thank you for the very detailed information. I will do some research and see which option works best. Your help is much appreciated.
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