1031 Identification process & strategy
I am planning to sell my SFH rental to exchange for MFH. However I have not yet settled on the exact type and location of the replacement properties. I have been looking from 3-4plx in over CA bay-area and Sacramentor, to commercial ones in Texas. Do I have to buy the exact property that I identified in the 45d window?
Some website says IRS mentions the final replacement property needs to be "substantially the same". But that's really vague -- is a 4plx 30 miles away from the identified 3plx good?
I am curious how people do: for example, I might identify 3 properties (or a few more w/ 200% rule) after day 20. but lets say at day 44 a different property comes up that I really like which is not quite "substantially the same" of the identified ones. Can I change?
What's the general strategy to allow the biggest flexibility?
Also I tried to find the IRS code 1031 section original text but couldn't. Anyone has a good pointer. All the information I have are from various website but I like to get to the original source.