Author Topic: Reverse 1031 exchange - anyone done one?  (Read 152 times)

Papa bear

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Reverse 1031 exchange - anyone done one?
« on: January 08, 2019, 10:35:24 AM »
My parents have identified a rental property to purchase and they would like to sell a current rental with a 1031 exchange.

The purchase of the new rental would happen before the sale of the current rental property.  It looks like there is some tax code that allows for this as a reverse 1031 exchange.  From my brief reading it looks like you need to identify your property to “sell” in 45 days and then have to sell within 180 days.

Problem is, no one my parents have talked with have any idea how to do one.  Has anyone gone through one?  Does anyone have recommendations for lawyers/accountants/title companies in Ohio that could assist with this? 

Would love any help! 




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CowboyAndIndian

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Re: Reverse 1031 exchange - anyone done one?
« Reply #1 on: January 08, 2019, 04:56:13 PM »
Yeah, I did one a couple of years ago.

I sold 2 rentals and bought a new property.

The whole thing is described in detail here https://forum.mrmoneymustache.com/real-estate-and-landlording/questionsadvice-about-rentals-gt-1031-exchange-gt-rental-gt-primary-residence/

Let me know if you have any questions, the thread is quite detailed.

Edit: On re-reading your message, I see that you are talking about a reverse exchange. I did a straight exchange. A reverse one is harder from what I read.
« Last Edit: January 08, 2019, 05:03:38 PM by CowboyAndIndian »

Papa bear

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Re: Reverse 1031 exchange - anyone done one?
« Reply #2 on: January 08, 2019, 05:52:47 PM »
Yeah - we’ve done a regular 1031. But this reverse one, we don’t want to mess this up. 

An opportunity came up to purchase a house at a great price that they couldn’t pass up.  But timing won’t work for a standard 1031 as the other rental probably won’t sell until summer.


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Rocketman

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Re: Reverse 1031 exchange - anyone done one?
« Reply #3 on: January 10, 2019, 03:30:34 PM »
I believe, You will need a 1031 intermedia, someone to “buy” the property you want and hold it until you are able to sell the property.

A good intermedia will handle all of the issues, so you don’t get burned.

Good luck

Papa bear

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Re: Reverse 1031 exchange - anyone done one?
« Reply #4 on: January 11, 2019, 09:07:21 AM »
They’ve had quotes up to 8k to be the intermediary for a reverse 1031.  Same place said a regular 1031 would be about $750.

It sounds like no one wants to do this.

Looks like they’re going to buy the house anyway and potentially do a standard 1031 with a different place later this year.


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