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Updated 7 months ago,

User Stats

675
Posts
884
Votes
David Song
  • Real Estate Broker
  • Redwood City, CA
884
Votes |
675
Posts

1031 exchange from 2 properties into 1

David Song
  • Real Estate Broker
  • Redwood City, CA
Posted

Planning to sell two investment properties in CA and buy one primary residence in CA.

Property 1 is listed and expected to sell in August to September timeframe (Around 150K long term profit, total sale price around 0.85M, no loan)

Property 2 is under renovation and expected to be listed in August-September, and close around October to November (around 400K long term profit, total sale price around 1.7 M, around 0.6M loan. ~1.1 M in cash).

What is the best time to buy the replacement property? Under 45 days, I need to identify replacement property. Does that mean I need to be under contract for the replacement property? Or just put an offer into it? What if the offer is not accepted?

The replacement property value should be 0.85+1.7=2.55M or above? Can I still get a loan for this property? If so, do I have to put all the cash (i.e. 0.85 + 1.1 = 1.95M) from the two escrows into this replacement property?

Also, what if Property 2 is sold after Day 45, when the replacement property is already identified for Property 1?

Any experienced 1031 exchanger can provide some insight into this scenario? Greatly appreciated.

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