Finding Properties for 1031 Exchange: Williamsburg, VA

[April Eilers]

We are selling a couple properties and plan to do a 1031 exchange. There is very little on the market in our area (Williamsburg, VA). Any suggestions for finding off-market deals? If other markets are preferable, please advise as we aren't bent on staying in the Williamsburg/Toano area, but it would be nice. Thanks!

[Dave Foster]

@April Eilers, A good realtor will have the MLS covered for you. Many times investment grade residential props will be found on Loop net and other commercial sites so a commercial broker can be a help. Local meet ups like REIA groups can be a huge source of leads.

A caution though.  The time constraints will keep you up at night if you're not laser focused.  The 45 day window to identify potential replacement properties will start with the closing of your sale.  And if you're still trying to decide what market you want to move into - it could prove very challenging to successfully complete your 1031.  Case in point - I had a San Diego client who didn't know where or in what sector to reinvest.  She spent 45 days looking coast to coast at all types of residential, commercial, and vacation rental properties.  The end result was that she couldn't find any replacements she trusted.  But that didn't happen because the properties were necessarily bad.  It was because she couldn't spend enough time getting to know the market to trust her analysis.  

So the end result was not enough data in too many markets making good analysis impossible.

If you haven't listed the properties take your time and get a good handle on whats out there and where you want to go.  If you're listed then try to get as extended a closing date as possible.  Or a contingency in the contract that lets you extend if you're having trouble finding a replacement.  And if you're already under contract then get busy.  It's time to shop :)