1031 exchange, then refinance?

[John Soforic]

I am new to your site, but certainly not new to real estate. I have a quick question about a 1031 exchange...

When I buy the new property from the sale of another, can I then refinance the new property?

I am selling a flip for 260K and buying a group of duplexes for the same $260. I don't want to tie up that money forever... thus, can I save taxes via a 1031 exchange and then refinance to get the money out?

[Steven Hamilton II]

Originally posted by @John Soforic:

I am new to your site, but certainly not new to real estate. I have a quick question about a 1031 exchange...
When I buy the new property from the sale of another, can I then refinance the new property?

I am selling a flip for 260K and buying a group of duplexes for the same $260. I don't want to tie up that money forever... thus, can I save taxes via a 1031 exchange and then refinance to get the money out?

John,

Flips are not eligible for 1031 treatment. They are subject to ordinary income tax rates as they are inventory. 1031 is for property held as an investment such as a rental property.

@Bill Exeter will agree with me on this. He is a definite 1031 expert.