Finding a replacement for my 1031 exchange

[Zachary Bellinghausen]

I will have around $1 million after the sale of a property. There are no decent deals at moment. I need suggestions, or outside the box ideas? Industrial space seems in high demand when times are bad but they are inflated prices. Multifamily is dismal.

[Dave Foster]

@Zachary Bellinghausen, Every market is going to be a little different, just like every sector. If you're fixed on FL, then the first thing I would do is buy time if possible. Extend the sale of your old property if possible. And remember that if you're doing a 1031 exchange, you have an additional 45 days after the close of your sale to identify your potential replacements. I know that doesn't seem like a lot of time. But it's amazing how quickly a drop by the fed can impact your proformas. And it's equally surprising how seller sentiment can change on a dime if the dom is starting to creep up on them. Time may not seem like it's on your side. But it really is if you think of it that way.

If you don't find a replacement property you like, you could also look into passive investment opportunities like @Peter Fisher said. There are a few syndications out there, such as DSTs, that qualify for 1031 treatment and allow you to defer all of the tax and still provide passive income. The most important thing with these is that Investors can 1031 into these when the market isn't attractive and 1031 back into real estate once the DST expires and is sold.