1031 Exchange in California
Seeking advice regarding 1031 Exchanges. Looking to compare exchanging a rental property in San Francisco for rental property out of state.
I'm specifically trying to understand the risks and opportunities of using 1031 proceeds to BRRRR. Is this really feasible? It seems like it is, but only in certain conditions that limit the ability to refinance and pull money out quickly. Specifically, that the proceeds must be used to complete the renovation; then the purchase price becomes the After Repair Value, which then means there isn't much equity in the property.
Additionally, California has some additional tax laws that complicate this process.
I am posting this under lawyer and other as I am not sure what the right service type is.
Hoping to begin in the next 2 months.
Thanks,
Rachael