Learning about 1031 Exchange for multifamily apartments

[Josh Oaten]

I’m interested to hear how those of you that are or have been learning about 1031 Exchange for multifamily apartments have gone about your education. I’m finding it somewhat hard to find solid and straightforward information about the process and rules. Has anyone found a good source to learn or is it best to learn from a 1031 exchange professional?

[Dave Foster]

Thanks for the shout out's everyone.  @Sean Morrisey, that was a really fun podcast!! @Josh Oaten and @Ashley Wolfe, you bring up interesting perspectives regarding MF and 1031.  Aside from logistics such as timing, valuations, and title holding entities there really isn't a different way to apply MF apts to 1031 exchanges.  That may be one reason why you're not seeing a lot of specific content on that.

I'd recommend that both you take two separate but complimentary approaches to what you want to learn.

1. Learn how 1031 exchanges work in general.  The mechanisms, documentations, effects, and opportunities are the same for SF, MF commercial, raw land - any kind of real estate.  So if you learn 1031 in general you'll know how to use 1031 for MF apts.  The 1031 exchange is really an exit strategy out of a real estate asset that keeps you from paying taxes.  

2. Learn how to invest in MF apts.  The way to buy hold, and operate these types of real estate is what's unique.  And that's where syndicators like @Omar Khan, and @Alina Trigub and sophisticated MF landlords like @Sean Morrisey can be wealths of information.  

Once you've got a handle on these two aspects then you can begin to strategize on how to use them together.  Using options and long term due diligence or reverse exchanges to mitigate the timing issues.  How to sell and diversify from SF to MF assets and from more to fewer higher returning assets.  It's all part of the interplay.  But you want to learn how each works on it's on first.