Use a 1031 company or a realtor who's familiar with 1031

[Kenzie McIlvoy]

We own a SF long term rental that's older and not performing as well as we'd like. We make about $300 in cash flow but are constantly having to put money back in for maintenance. We have about $70k in equity and would like to 1031 it. Our tenants have been in the property since March 2022 but informed us that they are canceling their lease November 15th. We originally thought we had more time to research and prepare for the 1031 but now are forced to move even quicker. We've wanted to sell sooner than March 2023 so we are happy we're able to do it this soon but it does force our hand in moving quicker.

It has been an investment property since March 2022 but was a house hack starting June 2021, which we could use as rental history as well.

My question is: Should we go through a 1031 exchange company  or use our current realtor? I'm aware of all of the rules that come with a 1031 and want someone who's very familiar with 1031's. I know on the podcast people have mentioned using 1031 companies but am a little confused when it comes to actually finding one. Thank you!

[Dave Foster]

@Kenzie McIlvoy, You will need to use both.  Your realtor cannot do your 1031 exchange.  And the qualified intermediary for your 1031 cannot do anything but the 1031 portion of the transaction by law.

And you do have to use the services of a qualified intermediary who will be the unrelated 3rd party.  Without this QI involvement you cannot do a 1031.

The QI must be in place prior to the closing of the sale of your old property.  So you do have plenty of time right now to get yourself up to speed.  I'll pm you to offer some more resources.