Eminent Domain

[Tim Hoffman]

I am a seasoned investor (15 years and over 60 SFH) in Northern Illinois. I have a property next to one of the local High Schools that is being taken for some school expansion projects. They have given me a good price (after 3 months of negotiating) and my question is this. I know I can do a like kind exchange (1031) to defer the capital gains but is there another way since it is via eminent domain? I have historically bought foreclosed property and forced appreciation. With the time limits of a 1031 I may have to overpay for a property and that is killing me just thinking about it.

As a side note, negotiating with a School District was a very interesting process. At the end of the day, their final offer was actually more than my previous figure (about $6k). They said they had deadlines to meet and they would give me the extra if I could close in 45 days. That day I gave my tenants a 30-day notice to move. Paid $51k about 7 years ago (about 6 mo before the bubble burst) and their final offer was $105k. I love real estate.

Thanx for all your help