All Forum Posts by: Kadeem Kamal

@Kadeem Kamal - Congrats on adding value and creating some solid equity in recent years!  As mentioned your biggest challenge is going to be selling the package at/close to same time. In 1031 world this is called a "consolidation exchange". Selling several properties and using the proceeds to purchase one larger property. There are a couple of key components to this. But it is very doable...

1. Your replacement property needs to be equal to or greater than the aggregate amount of your net sales. Ex: Sell 3 properties for $500K each and purchase one larger MF for at least $1.5M

2. The purchase of the new property needs to be timed so that it can meet the 45 and 180 day deadlines for every property you want to put into it.  If you get 2 of them sold close together and 1 hasnt, then use just those 2 to purchase your larger MF. 

Here's a couple of things to look for as well.

1. As mentioned, sell them as a portfolio if possible. You may have to take a discount. But it may be worth it.

2. These types of exchanges are great for purchasing new construction. Find a builder building a MF you might like. Get it under contract to close in 6-12 months when it is done. Then wait until it is about 5-6 months from completion and start selling your old properties. Get as many of them sold as possible and then close on your new property when construction is complete (but still within the 180 day timeline from the date of your first sale).

You can go into contract for your purchase before you close your sales.

Hi Kadeem. I'm assuming the main reason for the 1031 is to increase cash flow, right? If the numbers are not making much sense where you live, you should consider investing outside of your market. I will say that it will be more difficult to find a buyer for all 3, or trying to close them at the same time. That's the challenge with doing a 1031 with multiple properties. I have a great 1031 company I work with that has a lot of education and information if you want me to send it over.