1031 Exchange - Process

[Conner Parsons]

I am looking to do a 1031 exchange , but have a question regarding the process. Does due diligence on the property need to be conducted before or after identifying the property within the 45 day window? For instance, what if I identify a property for the exchange, but then, after performing due diligence, decide against purchasing the property due to a defect that is uncovered during the inspection? Would a new 45 day window be initiated from that point, would I lose the ability to conduct the exchange, or neither? 

As a side note, I understand that you may identify up to three (or more) properties with the intent of only closing on one of them. Consequently, if one didn't pass inspection, you would have two other properties to choose from. For purposes of this example, what if you identified three properties but then decided you did not want to close on any of them?

Thanks in advance for your help!