Updated over 4 years ago on .
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Lows on a 1031 exchange
If I do a 1031 exchange but I can't find a new property do I have to pay a penalty or will I just end up having to pay taxes
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- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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@Chris Ng, even at several thousand dollars the Reverse can be beneficial and there are some ancillary benefits as well. We will typically assign you the membership interest in the LLC that is holding the property rather than have another real estate closing. So you in essence get a free LLC out of the deal and avoid a second closing with the potential of transfer tax and other things like title insurance.
And the biggest benefit to you is that while the QI is holding the parked property you should be making the revenue from it. At the same time your old property hasn't sold so you're also making the revenue off of it. Double dipping NOI can erase the cost of that reverse pretty quickly.
The range is fairly tight nationwide for for national QIs. The sky's the limit if it's an attorney one offing something. Since we're all playing show and tell, our fee for a similar exchange is $5000 plus the cost to set up the entity in the state you're in (generally around $150) and $850 for the straight portion of the exchange. So a reverse for us would be around $6000.
So there you go - I'm cheaper. @Bill Exeter's more handsome. Come to think of it, I think my prom date said the same thing :).
- Dave Foster
