All Forum Posts by: Christina Galdieri

@Christina Galdieri You can absolutely 1031 exchange into multiple replacement properties. The key is not the number of properties. To defer all tax you must purchase in total at least as much as your net sale.

This is what is known as a diversification exchange, and can be great for the investor who wants to diversify their portfolio. A common strategy I see with diversification exchanges, is that the investor will purchase the first property cash and the second with a mortgage.

This will allow you to mitigate risk on the first property but also allow you to do a cash out refi on the second, so now you have access to tax free cash that you can do with whatever you please.

There are a number of QIs right here on Bigger Pockets. The unique thing about this platform is that you can actually search reviews from BP members and interact with them about their experience with that particular QI. Many times your realtor may have a relationship with a QI. This can be good because your realtor will be using them as a resource to help you plan your 1031. It's really all about putting together your team - realtor,  title company, other adivisors, QI. You want them all to be able to communicate well with you and with each other.

You're welcome! You can ask if anyone in your network has a referral or had a good experience. If not, you can interview a few QI's. You'll want to look at their reviews, how they safeguard your funds, understand what their fees are, and how responsive they will be to your questions (do they work 9-5 only). 

Deferred.com put this list of QI's together https://www.deferred.com/1031-exchange-companies.

If you have any other questions I'm happy to help. 

oh bummer! Since the real estate is part of the transaction you can't do the 1031 exchange.

You could consider an installment sale, to potentially spread the tax liability over several years. If you needed the money ASAP that won't be super beneficial. 

Remember your situation is unique so it's important to consult with a tax advisor or CPA to explore all available options and ensure compliance with tax regulations.

Yes, you can use a 1031 exchange to acquire multiple replacement properties in Florida from the sale of your investment property in New Jersey. It does not have to be a one to one exchange or a asset class to asset class. Meaning you can sell an apartment and purchase an office building and it's a valid exchange. 

Regarding the location of the Qualified Intermediary (QI), it doesn't matter whether they are based in New Jersey, Florida, or elsewhere. The key is to work with a reputable QI who is experienced in handling 1031 exchanges. The QI will facilitate the transaction by holding the proceeds from the sale of your New Jersey property and using them to acquire the replacement properties in Florida.

Make sure to follow the 1031 exchange timelines: you must identify potential replacement properties within 45 days of selling your New Jersey property and complete the acquisition of the replacement properties within 180 days. 

The only way to know if your idea is worth doing from a wealth building standpoint is to do the math: 

What is the cost to acquire? Maintain - includes taxes and insurance?

What is the property appreciation in that market?  Is this the best place to invest in real estate?

How does acquiring compare to renting a small office or sharing office space with another business in that market?

It's all about the ROI. The best ideas are the ones that make financial sense.

One opinion...hope this helps (and that you're warm in this crazy weather we're having here in Florida).

Best.

Hi @Christina Galdieri! With the exception of building a trailer on the property (these are hard to finance), this sounds like a good plan AND if you are using it for your business AND your business pays more than 50% of the rent (if you have more than 1 tenant), then this is a more financeable property in the eyes of banks and credit unions as it would be consider a commercial "owner-occupied" property. 

Owner-occupied commercial properties generally get better interest rates and terms when compared to pure investment properties. 

Where in PA is the small piece of property you're looking to buy?