question regarding 1031 Exchange
Hi everyone. I bought a rental residential property for about $500k, and I estimate it will sell for about $1 million. The property needs to be repaired in order to be sold. The estimated repair cost will be about $100k. I also need to do a 1031 Exchange. For simplicity, let's just say that I will net $500k after the sale (after putting in $100k for repairs). I believe that in a 1031 Exchange, all of that $500k net gain will need to stay in escrow and be moved to the new property. I'm told that I cannot touch any of that $500k net gain.
Here's the problem. I do have the $100k for repairs but I don't want to fork out $100k to put into this rental property for repairs because my $100k will be tied up and be stuck in the next property due to the 1031 Exchange. If I do put in $100k for repairs, is there a way for me to get this $100k back into my pocket during the 1031 Exchange process, so that it doesn't go into the next property? If not, how can I spend $100k of repairs and not have this $100k be tied up into the next property that I purchase, which will be a 1031 Exchange? Thanks.