seller financing and 1031 exchanges

4 Replies

Hi Does any one have any experience in 1031's and seller financing. My scenario is that I just sold off 2 of my units and did a 1031 . I want to buy a 12 unit building and the seller is willing to do seller financing. Can I still do a 1031 exchange on the purchase? Any help/insight is appreciated. Thank you.

@Aaron Smith , if you're asking can you complete your 1031 with a purchase that includes owner financing then the answer is yes.  The owner financing acts just like any other lending instrument.  Only instead of a mortgage lender the seller is financing the purchase.

What if I am selling a home for 175,000 and it is a 1031.  Net proceeds are 156,000.  I want to buy an investment property at 175,000 but the owner is willing to owner finance 80% of the deal.  What happens to the remaining monies or do I have to go out and "sink" those monies into other assets until all the remaining cash is sunk it investments?

The answer is yes just as Dave Foster relayed!  That process is called pyramiding...  That is the good stuff.  You are pyramiding your equities!