1031 exchange into commercial building

[Christopher Brown]

Hey bigger pockets, so just accepted an offer on my quad plex, getting a decent amount out of it so long as the house appraises for the loan. I want to 1031 the proceeds into an 8 or 10 unit building. Is this possible? Also, I sourced this house myself contacting home owners directly, which is the same strategy I wanted to do with the commercial building. I was looking in Florida but im not finding many.

My questions are, can I 1031 exchange the money into a commercial building and if so, is it based on the sale or what I profit? Also, any recommendations on where to look for the commercial building would be appreciated. Thank you for your time.

[Dave Foster]

@Christopher Brown, Your profit only comes into play with a 1031 exchange if you end up doing a partial exchange.  A partial exchange is when you either purchase less than your net sale (contract price minus closing costs) or you don't use all of your net proceeds (net sales price minus mortgage pay off).  As long as you purchase at least as much as your net sale and use all of your net proceeds you'll defer all tax.

Perfectly fine to move from one type of investment property into any other type of investment property.