Anyone execute a 1031 exhange with a bridge loan?

Question

Good afternoon BP,

Anyone execute a 1031 exchange lately with a bridge loan? Just interested in the details. Planning to possibly execute one in Sep, and with our exchange we might be 50k short of the lenders requirement of 30k.

Thank you.

Johnny

Johnny Quilenderino · Answer

@Armando Melchor I did not need a bridge loan. I got a commercial real estate loan from a local lender and used @Dave Foster and his team. From putting the house on sale to my purchase was a total of 84 days! Let me know if you have any questions. Also, Dave is a 1031 master, so if you stick to his guidelines everything will be ok!

Cheers,

Johnny

Armando Melchor · Answer

@Johnny Quilenderino great question, how did this work out for you?

Dave Foster · Answer

@Johnny Quilenderino, Haven't even checked my inbox so I'll throw it out here first.  Typically bridge loans are used to purchase a property before selling a property.  This is counter to the normal 1031 process where the sale of the old property must happen before the purchase of the new property.

You can certainly use a bridge loan to purchase a new property.  But that new property could not be used to complete a 1031 because you have title to it.  Unless you were using the bridge loan to accomplish a reverse 1031 where your QI takes title to the new property with the bridge loan proceeds and holds it for you until your old property is sold.

Maybe there's more to your scenario than I see?

Johnny Quilenderino · Answer

Natalie,

I hit him up with a personal email earlier with more of the details. Thank you for the reference!

Very respectfully,

Johnny

Natalie Kolodij · Answer

@Dave Foster might have some input to how this would work out.