1031 Exchange & Seller Financing

[Alexander F Pollock]

Has anybody done seller financing with a property that was a 1031 exchange? I'm looking at a triplex that the owner has had since 2003 and was part of a 1031 exchange. They tried selling last year but couldn't find anything to buy. I really like this property because I can use the downstairs offices as a studio to teach music from, there are 2 apartments upstairs, and it's less than a mile down the street from where I live. I can offer the seller flexibility since I'd be willing to wait and understand the constraints of a 1031 exchange. I did find this blog about how there are two ways to do a 1031 exchange with seller financing but figured I'd see if anyone had any thoughts.

https://www.accruit.com/blog/s...

Thanks

[Dave Foster]

@Jared Prevost, This is a very tight rope to walk.  With a true land contract the 1031 must start with the signing of the contract (very difficult with a 1031.  Because the burdens and benefits of ownership of the real estate transfer with the signing of the contract not the transfer of deed.

A lease with an option to purchase is much easier.  The buyer simply leases the property until the seller is ready to sell.  This way burdens and benefits of ownership of the real estate transfer with the transfer of deed.  And money usually passes at that time as well.  So it's easier to 1031.