1031 Replacement Property Value & Timing

[Jay Wright]

Hello All! 1st post. Pretty new to real estate investing.

I have a question about the value of the replacement property with a 1031.

I recently purchased a house for $70K. Two weeks after closing a nearby business offered $107K for the property(they need a parking lot). As I had not even started renovating I accepted the offer. We are to close next Friday. My intent on this property was to keep it and rent it as I do with all my other properties. This is my first sale ever.

The following Friday after closing I am to close on the purchase of another property. Purchase price is $55K. This is a short sale property I bid on before I even looked at the first property(6 months ago, almost forgot I bid on it). Just worked out that it ended up being approved and set up for closing the week after.

On to my question:

1. Does the replacement property need to be valued more than the selling price of the Exchange property or just more than the profit put into the 1031? In my case the sale price $107K, actual profit is approx. $30K, new property is $55K

2. Is it possible to setup an exchange this close to both the sale and close of the replacement?

Thanks for any enlightenment

Love the site!

Jay