Offer approach to 1031 seller

[Adam R.]

I am about to make an offer on a property and the seller plans to 1031. Am I better off making a higher offer with a sellers credit due to buyer at closing to get to my net? Does this help with the sellers 1031 basis? Any other attributes to consider to improve my offer to this type of seller?

[Bill Exeter]

Hi @Adam R., 

A credit only serves to reduce the sale price for tax purposes, so it would not help the seller.  One of the challenges for investors completing a 1031 Exchange is timing.  They have 45 calendar days to identify what they are going to reinvest in, so you could offer to be flexible with the closing to help the seller buy some time in finding their replacement property.  Offering to cooperate can take a load of stress off the seller.  

Hi @Buddy Holmes, 

You can use seller financing, even with a 1031 Exchange, but it gets much more complicated and the seller may not be able to do a 1031 Exchange with a seller carry back note.  It depends on the seller's situation and ability to work through the extra complications.