Question about definition of like kind for 1031 Exchange

[Andrew Shofer]

Hello All,

I was curious to know if it is possible to use the 1031 Exchange to sell a small multifamily 1-5 units in exchange for several single family homes that in total would be more expensive than the initial multifamily. I recognize this isn't exactly like kind but wondering if this has been done or if there is a multistep process involving several transactions over a period of time where you can shift from multifamily to single family or vice versa? They would indeed all be rental/investment properties and not personal residences.

Thanks! ~ Andrew

[Dave Foster]

@Andrew Shofer, Any type of real estate held with an investment intent can be exchanged for any other type. As long as you are purchasing at least as much as your net sale the size of the purchase doesn't matter.  And you can also go from 1 to several or from several to 1.

So your strategy of moving into SFR from your MF position right now is exactly what the 1031 was designed for.