I'm going to be selling my first investment property in New Jersey. I was thinking of doing 1031 exchange, but I wanted to learn what the cons are of doing a 1031 exchange besides the deadlines to identify and close on properties. Is there any type of foreclosure / bank owned properties that I could not use to purchase with a 1031 exchange?
I appreciate all of your experienced feedback.
@Eda Tekeoglu , The 1031 requires that you adhere to some specific criteria. But they're not that onerous and the tax deferral you can receive is well worth it as long as you are intending to buy more investment real estate. If that's the case why not use the deferred tax for your benefit to buy more investment real estate?
The type of property or method of purchase doesn't matter in a 1031 as long as the property you are purchasing will be used for investment and the closing can meet the required timelines. Foreclosures/bank owned are just fine - especially if the property is already in the REO portfolio of the bank. Sometimes the foreclosure process can be a little predictable but if you've got a good team monitoring your timelines you'll be fine.
I'll reach out privately to put a paper in your hand that lays out a good road map of the 1031 process.
Thank you so much Dave!
@Dave Foster Could you send that road map to me as well? I am in the exact same situation. Thanks!
@Account Closed I'd be happy to. I don't see an email address on your profile so we'll have to become colleagues in order for me to forward. I'll reach out with a request in a sec.