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Rhonda Louis
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Trying to understand 1031 Exchange

Rhonda Louis
Posted Apr 18 2021, 06:36

My husband and I are selling 7 duplexes.  We are wanting to do at least a partial 1031 exchange, but it is becoming very overwhelming.  We close in less than 2 weeks and we have not decided how many of the properties we want to put in the exchange.  My CPA does not have the time to meet with me, and told me to exchange all of them.  But if we put all of them in the exchange, we will have fees for each of the properties we put in, and we are pretty sure we would like to keep some of the profits out, pay the taxes on them, and pay our mortgage.  We would like to do this, so we can have a little more financial freedom!  My question is this.

If we are selling each one of the properties for $253,000 and I do a 1031 exchange on 5 of them.  Can I lump these together?  For instance I saw on roofstock someone is selling their portfolio for around 1.3 million.  Can I buy a portfolio that has many single family homes?  So I would be purchasing more than 5 homes. (I am not saying this is what I want to do, I am just trying to figure this out)

Likewise if I 1031 exchange 3 properties, but I see one multifamily property at $800,000 can I exchange all 3 properties into that multi-family property?

Also, this sale was not expected we were planning on these properties being our retirement income.  However, someone came up to us made us a good offer and we accepted.  So now it is a bit intimidating trying to figure out our next step.  What our next investment should be.  If anyone has any advice, we are all ears!

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