EXCHANGING MULTIPLE PROPERTIES FOR ONE

[Will Devenport]

Hello fellow investors. I am new to this forum, I have been browsing Biggerpockets for a while and it is about time I signed up.

I have been investing in properties for about 10 yrs now and I am at point where I would like to take the equity in three properties and roll them into a large apartment complex. However, I am not sure how to sell three properties within the 45 day window I have for the 1031 exchange?

I hope someone has done this before and could offer some pointers.

The properties for sale are a 5-plex, a duplex and a beach cabin. The two plexes are investment properties and the beach cabin is my primary residence (for gain exemption purposes). I own them outright and they are worth between $300k-$350k each. I am hoping to put the total equity into the largest complex I can afford. (40-60 units, $2-4mil.)

Any advice on how to do this would be greatly appreciated.

Thank you

[Bill Exeter]

You can do a regular Forward 1031 Exchange. The 45 and 180 day deadlines will start running with the closing of the first relinquished property so you will have to coordinate carefully.

The Reverse 1031 Exchange allows you to acquire your replacement property first and then sell your relinquished properties. However, your equity is trapped in your relinquished properties so structuring a Reverse 1031 Exchange may pose liquidity challenges.

You can even start with a Forward 1031 Exchange and then merge/combine into a Reverse 1031 Exchange if you must acquire your replacement property before all three (3) of your relinquished properties.