Landlords, Agents, And Others; Time To Move

businessman standing in front of a blackboard trying to decide whether to buy or to sell

So Many Times I Give Information And Then I Do Not Follow It Myself

There is something that I think Duane and DJ Gomer and other rental owners should consider. Simple basic 1031 Exchange. And real estate agents should be telling their clients some of the benefits of exchanging in this market.

There Are So Many Fancy Terms In Exchange Work

  • Like for Like
  • Napkin Test
  • Boot
  • TIC Exchange
  • Reverse Exchange
  • Construction Exchange
  • Mortgage Relief
  • Designate
  • Intermediaries
  • Safe Harbors
  • 45-180
  • Conversion to Rental of a Home
  • Basis After Exchange
  • And so forth

Today, Just The Facts And Keeping It Basic:

Many rental owners brought single family investments during the down time. If an owner purchased around 2008 to 2011, chances are that there would be some good equity in the rental. Some of you fit the description.

You have considerable money equity in a rental. Why not trade the rental for two or three rentals or for a much higher priced rental? More leverage, more potential for growth, larger portfolio, more appreciation, more depreciation, etc. etc. etc.

You should sell your property first and do a regular exchange. Reverse exchanges are difficult, expensive and esoteric. You sell and the money remains with an accommodator. You have 45 days to select your trade-up properties and 180 days to complete the transactions.

Therefore, you must get Lender-Approved before even thinking about this. Then start researching where you will be going so you are ready to move when your property is listed for sale and an offer appears. It is extremely important that a potential exchanger find an agent (who knows exchanges as not all do) an accountant, attorney and accommodator and be ready to go.

Real Estate Agents: Think It Over

You have people who should consider exchanging. If you can convince someone of the great benefits, you should get a listing and two possible sales. MLO’s that looks like two new loans to me. Escrow officers that looks like three escrows, etc. etc.

See you at the closings.

2 Responses to Landlords, Agents, And Others; Time To Move

  1. Larry Isaac June 24, 2018 at 2:20 pm #

    1031 exchanges are exremely useful to leverage up and I tell clients this all the time. I also tell them, as you have, to have your lender ready to go AND I suggest that they start looking for the replacement
    property as soon as they think they want to do an exchange. Find, at least, 3 or more to be on the safe side should one or more go into escrow before you can get to it. Finding the property to exchange is, by far, the most difficult part providing you price your property to sell correctly. in my opinion, the easiest properties to work with are multi-family residences for the average person.

    • Duane Gomer June 27, 2018 at 4:42 pm #

      Agree with everything you are saying; I worked larger apartments (staying above 40, children buildings, etc). I did them as small syndications, and I did not want to lots of weekends and nights so I went straight into mult. Keep in touch.

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