Divulging information about oneself

[Edward Curtis]

I am selling a commercial building in Mass , Signing a P&S in a day or so, closing in about 60 days. I am looking to invest in Florida using a 1031 exchange. I am looking to shield about 1.8million in gain, I might put as much as 1.4 down. I'm considering Single family to Multifamily Buildings though will consuder anything including DST, Self Storage, etc. I will be relying on cashflow to finance my retirement. I'm completely new in doing this. My question is when I comuniucate with realtors, or property managers, should I divulge that same info or withold some of it. Comments will be appreciated

[Dave Foster]

@Edward Curtis, piggybacking on what @Mike Dymski said, one of the complaints we hear frequently with 1031 exchangers is that sellers will attempt to hold them hostage if they have knowledge that they are doing a 1031.  So keeping the 1031 on the DL can be an important desire for an exchanger.

Every party to the transaction has to be notified that your part of the transaction is a 1031 exchange.  But there is no requirement where that has to occur.  We always provide documentation that is passed out at the closing when it is functionally too late for anyone to complain, balk, or hold it over your head.  Here are a couple of other options for you.

1. Simply make all of your contracts assignable.  This allows your QI for the 1031 to do anything they need to make the 1031 happen.  And prevents the seller from balking.  

2. Built in cooperation clauses. Check your local MLS contracts. Many of them for NAR boards of realtors have addendums already as part of the contract. So you can proceed without giving the seller any real knoweledge that you are in fact doing one.

3. Get it out of the way early with an addendum of mutual cooperation.  This does alert them that you are doing a 1031.  But it gets it out in the open and keeps it from being an issue once you're well along in the negotiations.