All Forum Posts by: Cassandra Brown

Thank you for your reply; I don't actually know what Cost Seg is or how to redeploy the funds.  I'm looking at a very big tax bill  (for me--more than a third of the selling price) if I don't do the 1031

I'm new to 1031 exchanges and wonder if it is wise to have identified and made offers on properties even before the closing on the property being sold (contingent on the sale) so that the closing can be quickly and I can be sure that the property is identified in the 45 day period.  I'm worried that I will identify properties and then the sale will somehow fall through and I won't meet the exchange requirements.  And, should I identify 3 properties or 200% value ? 

Thanks for any thoughts and advice.

Thank you all so much for all this info and advice; it really helps me clarify my thinking on this.  Feeling much less helpless.  I do have the property tax reduction because the property came from my mother, but since it came before my mother's death I didn't get a stepped up basis, so the tax liability will be very large unless I did a 1031.  I am hoping to use the property to fund my retirement and provide extra for my grandchildren's college educations, so getting the right price and the cash flow is important to me. 

I"m going to rethink the sale and get more courageous about fixing the place myself. 

Thanks again so much.

I am a first time 1031 exchanger and am a novice purchaser.  I own a 4plex in San Marcos, CA (San Diego County) that I was given by my mother in 2018.  She has since died and I no longer have any reason to keep going to California. I was ambivalent about selling it, even though I live in Wisconsin and am completely reliant on the manager, but a long term tenant moved out and the rehab on the place was exhausting and confusing. 

 I have an accepted offer for reasonable price, ($1,415,000) but now the inspection has revealed a termite problem.  The buyer  naturally wants a reduction, but I already reduced to get to the current price.  I had 4 offers of 100K below list in the first 24 hours; so then I did a multiple counter offer on advice of the broker, reducing the list price by $50K, and got 3 takers on that; the broker  then recommended this buyer.

I was unaware that my agent is also the buyers agent until this point in the proceedings, (although this info was present in the offers that were presented; I just didn't read closely enough), and it has made me feel weird although he has been very helpful and seems nice (only phone conversations).  He is recommending I reduce my price again by 25K

I was about to buy a 4plex in Burlington, Vermont, where my daughter lives, but the contingency of this sale was a problem for the seller so they took a different offer.  So I still haven't identified the properties for the 1031 exchange and feel a little wary about the whole process now.

I'm just wondering if I should follow the agent's advice and take the reduction or wait and start over--but now that I have the termite report I will need to disclose that, of course, and I wonder if that will affect the price.    Meanwhile the apartment that was redone has been empty, so no rent and the buyer wanted it to remain empty for this last month or so.

My goal was to make more rental income by exchanging this property for ones that have more cash flow even if they had less appreciation. (I'm retired so cash flow is important to me).  

Any thoughts or advice is appreciated.  

Thank you so much; after these comments I have contacted a real estate/tax attorney for a consultation as it seems that I need a much longer term and wider view of the situation.  Its a little terrifying, actually.  I've just had so much trouble trying to manage an apartment rehab from a long distance, even though I have a manager for the fourplex, that I feel I need to move everything closer to my home.  

I'm new to this and thinking of exchanging a fourplex near San Diego for some properties nearer to my residence, in Wisconsin. I received the property from my mother as gift (not inheritance) so there is quite a bit of tax liability if I just sell it. I'm thinking I need to have an LLC for any rental property that I have, and so I have been trying to understand what I need to do to transfer this California property into a Wisconsin LLC; and if I need to do that before the exchange. If not, then is there any problem with purchasing the replacement property as an LLC?