A 1031 tax deferred exchange is an excellent tool for the real estate investor. And there are plenty of good sources to find out more about that tool without me rehashing the whole process in great detail.
Follow these two links to get more details and benefits of the 1031 exchange:
Jeff Brown’s Bawld Guy Talking
Starker Services, Inc.
This post, however, is here to talk about what the real estate investor can do to minimize his/her feelings of overwhelming pressure when they are in the middle of a 1031 exchange. And how a real estate agent working with investment properties can help to walk that exchanger through.
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Some good tips, Chris.
A couple of things I keep in mind:
1: Best case scenario is to know what property you’re going to buy before you sell the original property.
2: If possible don’t declare your purchase until the negotiation is over and the final contract is signed. You’ll have to disclose to the seller that you’re doing a 1031 at closing, but don’t let the cat out of the bag during the negotiation. He’ll know he has you over a barrel if he figures out you’re in day 41 of your identification period and he wants to extract a little more value from you.
3: Watch out – any left-over funds aren’t released until the deal is finished. So if you declare multiple properties and don’t buy all of them then you have to wait till the end of your 180 day period to get your cash out.
Great blog. Keep up the good work.
Christopher, You are right on all accounts. Point 3 caught one of my clients off guard one time even though I and the intermediary had brought it up. Just one of those things that didn’t register with him.
For 1031 Exchange Properties Listings and Sales Comps, feel free to view at http://1031exchangeproperties.wordpress.com.