1031 exchange - what steps involved

[Kiran K.]

I'm looking to do 1031 exchange, sell rental property (SFH) and use proceeds to buy another property. Can this property be duplex or commercial space?

Do i have to go with attorney, what's an 1031 intermediary, want to learn the steps involved and things i need to be careful about. 

PS: Aware of 45 day identification and 180 day close..but rest is what i want learn and find necessary professionals to trigger the 1031

[Jiri B.]

It's relatively simple process. Sounds like you already have some knowledge so will just answer your direct question.

The replacement property needs to be like kind exchange. I don't think there is a very specific definition for that so in your case, as long as you are going from an investment property to another investment property, you should be fine. I did a duplex > sfh.

The intermediary is pretty much just someone who holds the funds for you in a trust account. I used a specific intermediary company to do that. I think it was about $800 and they took care of the funds / payments and paperwork so it was worth it. But your closing attorney could technically do that as well for you if that is something they offer. 

The whole process sounds complicated but once you do it once, it's really very simple and very straightforward as long as you stick to the rules.