Identifying Agents to Invest Over a Million in a 1031 Exchange

[Arturo Pena Miranda]

BP Community,

My family has received an offer to sell a real estate asset for over one million ($1,000,000). Whether the transaction goes through is not guaranteed, because the offer is contingent on the buyer sorting out some immigration hurdles.

Assuming the transaction goes through, my family has an enormous capital gains tax bill to pay. We want to avoid that.

We are interested in purchasing numerous C+ to B+ single-family homes meeting, at least, the 1% rule. Identifying numerous properties in such a short time frame and in the seller's market we are in is extremely challenging. Because of the immigration hurdle, I am not sure how long we may have. Once that clears, however, the transaction will happen promptly and we will be onto the races.

The property is in Florida and we would be interested in exploring Florida investments. We are also open to considering investments in other areas, especially in the Southeast and Midwest, so long as an agent refers to us C+ to B+ properties meeting the 1% rule, makes a good case that they will appreciate in value, and refers us to other team members that we will need for an out of state investment (contractors, property managers, etc.).

In all likelihood, we will be working with numerous agents throughout the U.S. to make this work. Any leads are appreciated.

[Dave Foster]

@Arturo Pena Miranda,  Very good timing on your part.  I wouldn't slow down now at all.  Because once those hurdles are overcome as you say, the race is on.  And the timelines of the 1031 will feel like a strangle hold.  I realize there's still some uncertainty in the transaction but identifying your markets and team is good to do now.  And if you feel comfortable putting offers in on purchases that is perfectly fine.  You can go into contract for your replacements in the 1031 before your sale closes.  You just can't take title to the new properties before the sale closes.

So contracting with contingencies can help you out. It also wouldn't be a bad idea to nose around for a portfolio or two of the SFR rentals you like. A portfolio can occupy just one spot on your 1031 ID list.

You may watch some good properties come and go while you wait for the sale to be sure.  That can be frustrating.  But it will give you a very good sense of the market and when you're ready to actually buy you'll be very confident in your knowledge of the market you want to enter.