I am open to ideas

[Jim Celmer]

Hello guys, I have rental properties and I have a closing to sell on March 3. I will be doing a 1031 and have extra funds to add if the deal or deals are good enough. Without this property I have 8 SFH that are paid off and producing. This property(524 Half Moon Lane 71111) is 15-16 years old is why I am selling. I prefer new construction and 4 bedrooms.(they cost almost the same as a 3 but rent for more). The proceeds from the sale will be $280ish and I can bump it up to $500K investable if needed. What would you do? And thanks for looking and responding. Jim

[Dave Foster]

@Jim Celmer, The 1031 exchange is going to allow you to purchase any type of investment real estate anywhere in the country. But with that flexibility comes the shackles of the timing requirements for the 1031. The exchanges I see fail most often (but admittedly, there are very few we see fail) do so because the client isn't already focused on the location, sector, or both for their replacement. There are a few things that make your exchange smooth and simple, so you don't have to feel the pressure of those time frame requirements. One would be if you find a property you really like, you could get it under contract immediately, even if it's within your 45-day identification period. Or even before you close the sale of your old property. You can't take title to the new property until your old property is sold, but you can be under contract at any time.

In addition to that, you could add contingencies where you close once your old property is sold. If you need to motivate the buyer or seller, you could add some earnest money to the deal. In any event, you are right to be sorting out right now where and what you want to invest in. Use the 45-day window if you need it. But don't wait for it to get started.