1031 Exchange Suggestions

[Roberto Lopez]

I currently have one rental in the Denver metro with decent equity and I am considering doing a 1031 exchange into a multi-family unit to scale my portfolio.  Any suggestions on how to begin the process or experiences?

[Dave Foster]

@Roberto Lopez

In order to start the process of a 1031 you have to get a QI involved prior to the closing of your sale, the best time to start working with them is as soon as you get a contract for the sale of your property. As @Scott E. mentioned the 45 day rule is what causes folks the most problems when doing a 1031 exchange. If you're worried about finding a replacement property and you're confident you can sell your property quickly then the best thing might be to get a contract on your replacement before you even close on your current property. The IRS just says that you have to close on the sale before you close on the purchase, it doesn't matter which goes under contract first. Here's an article that we wrote for BP about additional strategies to make your 1031 process smoother in todays market

https://www.biggerpockets.com/blog/contributors/davefoster