1031 exchange into a MHP

[Alison Zywicke]

Anyone have any tips on 1031 exchanging into a MHP?  Should I find the deal and then list my house so that the timing works out?  Should I forget about the 1031 exchange (because of timing) and look for a MHP in an opportunity zone? 

[Glenna Wood]

Depends on a whole load of things you haven't defined... 

Firstly, based on my 1031 experience, I don't think you can use 1031 $$ to buy into an OZ fund. It's a fund not an asset to be titled the same as your 1031 sale property. Need the experts to confirm.

There is nothing special about a 1031 from a house (assuming it's an investment property) into a MHP that you will own directly other than it's just much more complicated timing as you would be moving from a house market with loads of buyers to a RE niche market, MHPs, with few sellers. Doable but will take lots of research on your part to see if it fits your goals, risk tolerance, and investment horizon. My 1031 tip is that I watch my sell/buy markets closely for about a year to get a good estimate for timing. I always sell first. The day after closing I submit my replacements. The 1031 tricky part is can you find the replacements to meet the deadlines? I personally find it too risky to start the exchange before my sale but this is doable and your QI can clarify this process. In any case, my second 1031 tip is have a plan B for your exchange $$ in case you don't ID or buy the replacement(s) on time. What will a full or partial boot cost you? Do you want to add a mortgage to new property to get the numbers to work? I'm now researching DST as an option for future 1031 exchanges. Have no experience there.

Investing in an OZ is another whole sterling opportunity or can of worms depending where you are at in your life. I own property in an OZ but not sure if I'm going to go down that path when I sell it. I'm at the cranky old lady stage of turning my RE into cash so my financial dummy heirs won't do something stupid after I'm not here to tell them what to do... You look like you're at the young whipper snapper stage. Do your research on OZs and go for it if it fits. No one will look after your $$ better than you. Wish you all the best!!