Financial advisor recomendation

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I am getting ready to do a 1031 exchange that I have about 50% equity in. A few questions.

1. Does it make sense to pull out most of my equity before I do the 1031 exchange so that I don’t have use all my equity in the exchange I can use it to close or have cash during the process.

2. Can someone recommend a lender that can give me some ideas how to get financed for multiple units during the 1031 exchange.



Make sure you vet your QI, if you haven't done so already.  A great QI will make your life so much easier.

@Jeff Betschart I would be cautious if you plan on doing a cash-out refinance prior to a 1031 exchange. One of the requirements of a 1031 exchange is that you reinvest all of your equity and all of your debt into your replacement property. If you do not follow that requirement you may have a taxable situation. Under audit, the IRS may view your cash-out refinance as you taking cash at closing, which is also a taxable event. Usually if someone needs to pull equity out of a property and a 1031 exchange is involved most will sell their relinquished property, purchase their replacement, and refinance within a few months after closing on replacement.

I'd be happy to provide you with some contacts who can provide financing for your investment property.

@Jeff Betschart , @Lauren Speidel is right on the refinance immediately before closing.  I think the answer for you will lie in making one of your purchases a cash no debt purchase.  You can allocate your proceeds in any way you choose toward your purchases.

So if you use your 1031 to purchase one for cash and then use maximum leverage on your others you can refinance the debt free property easily immediately after the 1031 is complete.  At that time you would no longer be perceived as taking profit out of the sale.  You would simply be accessing debt secured by the equity.

BTW - Thanks @Daniel Hyman for the shout out!

Thanks, @Daniel Hyman I have already talked to Dave Foster and he has more than educated me. You are correct he is a fantastic reference. 

@Lauren Speidel I would appreciate any reference you forward my way for financing. 

What you are saying makes sense. I was just wanting to know if it was possible to have some extra cash prior to closing that way I could use it to pay for miscellaneous expenses that might come up during closing or if I needed extra funds to tide things over before the exchange went through. 

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