Delayed 1031 and SBA loan

4 Replies

BP, I need your help!

I am considering the purchase of a small commercial property using a SBA 7a loan. The loan would be in the name of an LLC (an eligible passive company). I would like to finance the property without selling another rental property I own in my own name. I understand that I can utilize a 1031 exchange to sell the property and exchange it for the new property now.

However, I would like to avoid selling my investment property as I am in the accumulation phase of my investing life. I would like to add the condo to my portfolio. Can I purchase the condo and at a later date, if I determine it necessary, sell the investment property I already own and 1031 exchange the proceeds into the condo I have since purchased? Is there a way to buy into the LLC that owns the condo or some other scenario?



@Tim M. , It sounds like you are wanting to purchase your new property now and a few years from now use the proceeds from a 1031 exchange to apply to this property you are buying now.

If so that will not work. You cannot exchange into property you already own. And even if it is titled in a different entity it's probably a single member LLC and I imagine it would still be you as the tax payer.