Reverse 1031 Exchanges
I have to purchase my replacement property first, can I still qualify for a 1031 exchange?
You may find yourself in a position where you must acquire your replacement property before you sell your existing property. Perhaps the sale of your existing property falls through and you must decide whether to proceed with the purchase of your replacement property or risk losing the opportunity. Perhaps you want to eliminate the risk involved with the 45 day identification requirement in a regular Forward 1031 Exchange by ensuring that you have your replacement property locked up.
The Reverse 1031 Exchange allows an investor to proceed with the purchase of the replacement property before they close on the sale of their existing property. Just like any 1031 Exchange, you must retain the services of your Qualified Intermediary and have the Reverse 1031 Exchange in place prior to any closing. Your Qualified Intermediary will acquire and hold, which is referred to as parking, legal title to your replacement property.
You then have 180 calendar days from the date your replacement property is parked to sell and close on your existing property. Reverse 1031 Exchange transactions have become significantly more popular in recent years.
However, reverse 1031 Exchanges are significantly more complicated and require an expert. Call Exeter Reverse 1031 Exchange services for their expertise at 1-619-239-3091 or visit http://www.exeterco.com