What can I buy with a 1031 Exchange?

[Sonny Sach]

Hello all,

I may be receiving some funds from a fix and flip and wanted to know what I can use them for with a 1031 exchange besides another rental property?  Can I invest in a Syndicate for land development?  Can I invest in Fundrise?  I am looking for all options that are available to us.

Thanks,
Sonny

[Dave Foster]

@Sonny Sach, Bad news from the get go. Unless your intent was to hold that property for investment use it does not qualify for a 1031.  Fix n flip implies that your intent was primarily to resell and not to hold.  So that would not qualify.

But beyond that property that qualifies for your replacement must be actual investment real estate. Investing in a fund or a REIT or an entity that owns real estate does not qualify. The 1031 is only for the sale and subsequent purchase of actual real estate that you have owned with the intent of holding.