What is the best way to perform a 1031 in this market?

[Mindy Jensen]

Another post about not being able to find a property with only 10 days left in a 1031 prompts this question.

In this current market, what is the best way to perform a 1031 Exchange successfully? Do you sell and hope you can find something else in the allotted time? Do you hold off listing your property until you find something first? Do you continue to hold and wait for a market change?

What steps can you take to give yourself the most chance for a successful Exchange?

[Dave Foster]

@Mindy Jensen, timely.  Here's how to make the best of things if @Jason Turgeon, sell and hope method doesn't work (BTW - jason - excellent diligent work on your part to make it happen.  You didn't just sell and hope :) 

From an email conversation today .  
1. Don't turn in your 45 day list. Your exchange dies on day 46 and you get your proceeds but the tax will be due next April.

2. Take a shot at a couple properties and list them on your 45 day list. If they end up working great. If not then your exchange will die on day 180. You get your proceeds and the tax will be due. But because you will receive the cash i 2020 you won't have to pay the tax until April 2021. Your accountant will do this for you.

3. Take a look at an opportunity zone or find a couple DSTs or TICs that could accommodate you. The returns are actually competitive with what people actually get in the market (not what they think they get :). You continue to defer your tax and still get to continue depreciating the asset as a tax break.

Note that the 2nd strategy has a timing factor built in - it will only work if your exchange starts in one calendar year and ends in another calendar year.