Newbie- 5 acre flip- offering owner financing- 1031 exchange
Hello!
Seeking any advice from the pros on owner finance and 1031 exchange. Thanks in advance!
I purchased an inexpensive 5 acre property out of state (1000 miles) for two reasons. 1 to gain experience and confidence in RE investing. And 2 to make a profit. I have never physically been to the property.
I purchased it for $6,000, listed it for $19,000 with an option for owner finance. Today I received an offer for $13,000. $10,000 down with three $1,000 payments at 6% interest over the next three months. My agent is suggesting a trust indenture over a deed of trust.
I'm happy with this offer as its the first in 6 months. Are there any red flags, warnings, tips etc that anyone has for me in doing the financing?
My second question is... can I do a 1031 exchange with this property?
Is it worth it on such a small deal?
If so, how do I set up a 1031?
Do I need to hire someone to file it for me?
If I 1031 it but don't find a new deal in time, will I default back to paying capital gains taxes? Or I am I obligated to find a deal?
I have been actively looking and preparing to purchase a $50k-range single family rental in my local market. It would be great if I could pull off a 1031 early on in my experience so that I will be more familiar with it for bigger deals in the future.
Thanks