Selling a recent commercial investment?

[Jeremy Johnson]

My partners and I recently (6 months ago) purchased a commercial building which we are also operating a business out of. Things are good and we are not looking to sell. However, another local business man has inquired about purchasing from us. 

This is our first commercial building and only our 2nd property (other one is residential). We have never sold a property so I am very unaware of what the process is like. I am slighty aware of things like capital gains taxes and am worried that since we've had the building for such a short amount of time, it wouldn't be worth it. However I am also slightly aware of programs to roll over into new investments and avoid taxes. The building is held in an LLC though and we would be happy to roll the profits over into 1 or more investments that are more passive (more rentals).

If we stand to gain a decent amount, is it worth it? What are the things I should be looking out for?

[Kyle Kadish]

The costs associated with a 1031 exchange are usually between $1000-$2000 for the exchange itself.  Those numbers can vary based on the number of transactions and dollar amount.  @Dave Foster could provide more info more data on that.

@Roland Rohde points to the challenge of finding replacement property(ies) within the 180 day timeline...it is possible to do, and they occur often.  

Factoring your tax liabilities and transaction costs will help you better understand if the strategy makes sense for this situation.