I'm looking to unload one or more of my San Diego rental properties as part of an 1031 exchange. They all have leases in place and paying tenants. Since this is part of an exchange, timing is very important. I'm wondering how long it typically takes to sell such properties? Do rental properties (condos) receive multiple offers like SFHs do in San Diego? Thanks much.
@Chris Ng you can sell quickly with tenants in place but typically with single unit properties, I.e. SFRs or condos, you get top dollar by having the units vacant and allowing traditional, owner occupied buyers, a chance to purchase. When you are selling with tenants in place you are usually selling to other investors.
There are a few ways to go about what you are trying to do. A couple of possible options are to do a reverse 1031 exchange which cost you a bit more than a traditional 1031 and you need more capital up front but allows you to be more competitive when hunting for your up leg. The other way to do it is going the traditional 1031 route but giving yourself two 15 day escrow extension options to extend escrow on your down leg in case you need more time to find a property.
@Chris Ng it depends on the property as to whether they would sell quickly with tenants in place. The desirability of the unit will affect whether people are willing to purchase the condo with these tenants in place or not. In short, if these are more entry level condos, they will likely sit longer because buyers for those units are typically going to be owner occupied and will need the unit empty. If they are more luxury style condos or in a very desirable location, these buyers could be looking for a second home, investment property, or they may be able to bring more money to the table and do not need the unit empty to satisfy the owner occupied requirement. The time on market for these tenant occupied condos will be very unit and location specific!
@Connor Nellans Thanks for the input. I'm not sure if I'd call it luxury style but I think the location is very good... obviously I'm a little biased though.