1031 Exchange Into a Property Already Under Contract?

[Michael Hayworth]

I have a mid-size mult-family unit under contract. There is an opportunity to sell one of my existing 4plexes quickly through a wholesaler to help with cash flow. Is it possiible to 1031 that money into the purchase of the larger property? My understanding is that I can't have taken title to any part of it, which wouldn't be the case, but it's my first 1031 Exchange and it seems worth checking. I hear about having to identify lists of properties for potential purchase, does already having a property under contract affect that?

[Dave Foster]

@Michael Hayworth, You can go into contract for your new property before you close the sale of your old property.  In fact that is a very strong strategic move to alleviate the tight time lines of the 1031.  But you must close the sale of your old property before you take title to the new property.

And the QI for the 1031 must be in place prior to the sale of your old property.  Now that you've got escrow opened up for the old property it is the perfect time to get your QI involved.