1031 Exchange Properties
The 1031 exchange period is a stressful time for all investors. Locking down 1031 exchange properties that meet your investment needs is difficult and time consuming. Getting stuck with the burden of paying taxes is a real possibility if the transaction is not handled perfectly.
Rules of 1031 Exchanges
After selling one property, a buyer has 45 days to identify potential 1031 exchange properties. The transaction must be completed within 180 days in order for itto meet the guidelines. A complete and thorough explanation of the 1031 process can be found here. Also, please consult your CPA and/or attorney for legal advice on the process.
Difficulties of Finding 1031 Exchange Properties for Sale
Locating properties that meet your needs as potential 1031 exchange properties is difficult. The hardest part is finding properties that are a decent deal. After finding a decent deal the investor must be reasonably confident that the seller will perform. Many buyers get frustrated at this point in the process because they are in a hurry and the seller is content to wait and see if they can get a better offer.
Working with an experienced broker can alleviate a lot of stress during the process. Brokers are professionals at evaluating the property and accurately determining where your offer will stand. They are also extremely good at determining how motivated a seller is and how likely the seller is to perform.
How to Find 1031 Exchange Properties on Your Own
It's possible to find 1031 exchange properties on your own if you are comfortable with the process. I have a hard time recommending loopnet because of the lack of quality inventory and unqualified brokers that I run across frequently. However, if you want to find 1031 exchange properties on your own, this is probably the best option. I also like to use nnncap.com to find exchange properties.
In this situation, asking the right questions is extremely important. The first step is to find a few properties that fall within your price range and meet your investment criteria. The next step is to call the listing broker. It's a good idea to make it extremely clear that you will be representing yourself in the transaction.
Next comes the part where you ask a ton of questions. Find out if there are any other offers on the property. If there have been, ask why the offers weren't accepted. Then determine the seller's motivations for listing the property. Also, it's a good idea to ask if the seller will be willing to complete the transaction quickly enough to meet your exchange deadlines.
Final Thoughts on 1031 Exchange Properties
Call on as many properties as you can. Once you've compiled all of the information sit down and narrow it down to two of three properties. After that comes the difficult part, which is selecting the property to make an offer on. If you've managed to get this far by yourself you should have a good idea which property fits your situation the best.
In the event you're still not certain, it's not too late to consult help. Making the right choice out of all of those 1031 exchange properties for sale is not easy. This is a huge decision that may have serious financial implications down the line. Whichever choice you make, I wish you the best in finding 1031 exchange properties that fit your needs.
In some situations home owners or investors with a large rental portfolio may be interested in selling their property quickly in order to free up funds to complete their exchange. If you are in a situation where you need to sell your houses fast visit placerhomes.net. They should be able to help you out with any of your needs or any questions you may have.