Best practices for timing a 1031 in a hot market

[Dori Arazi]

I have equity in a San Diego property I’d like to leverage in a 1031 exchange to a multi-family in Nashville.

I have not yet found the right deal on the multi-family in Nashville. If I find the deal then try to set the house up for sale I am pretty much guaranteed to lose the deal. Though Nashville is a very hot market, and it might take me a while to find the right deal on a multi-family. If I sell first I might end up without a deal to transfer into. It seems like there is no good way to set the exchange up in a stable manner. Is there something I am not understanding about how this exchange is structured? Or are there accepted contingencies I can put in place? 

Any insight would be most welcome! 

[Dave Foster]

@Dori Arazi, No, you get the pain points of a 1031 pretty well.  And 45 days isn't a lot - although honestly these days real estate has become a commodity and I'm observing that the 45 days is more of a psychological than a structural hindrance for a motivated investor. 

As @Todd Dexheimer said a reverse exchange can be used.  But I wouldn't give up on the contingency route too quickly.  It never hurts to ask.  And while I do get that we're in a sellers market so sellers are less enthusiastic about accepting contingencies, don't forget that you're a seller too. 

So selling and requiring a contingency with a floating closing date for you to find your replacement is not a bad thing to explore at all.  Most buyers are perfectly fine to lock in their price get to wait for your 1031 - it's free appreciation to them.