Timing of identifying and closing on properties when doing a 1031 exchange

[Cassandra Brown]

I'm new to 1031 exchanges and wonder if it is wise to have identified and made offers on properties even before the closing on the property being sold (contingent on the sale) so that the closing can be quickly and I can be sure that the property is identified in the 45 day period.  I'm worried that I will identify properties and then the sale will somehow fall through and I won't meet the exchange requirements.  And, should I identify 3 properties or 200% value ? 

Thanks for any thoughts and advice.

[Dave Foster]

@Cassandra Brown You can go into contract for your new property at any time - even before you close the sale of your old property.  You're right to be concerned about  the 45 day period.  Becuase things can happen.  So it is good to be as far along in the process as you can during the 45 day period.

You can wait until all contingencies have passed on your contract to sell your old property.  Or you can use contingencies on the contract to purchase your new property.  Or you can even use contingencies on your property for sale - Make the buyer wait until you find your replacement or give you an extension/extended closing.

If you're planning on buying a property bigger than you sold you'll want to keep your list to 3.  IF you name more than 3 there are some limitations that can impact you.  The other reason to stop at three is that if you are only buying one you want to be under contract by the time day 45 ends.  And the odds of one of the other 2 properties still being available after you negotiate the firsr and it falls apart are very slim.  Better to focus on one at a time and work quickly.