All Forum Posts by: Mike B.

Hey BP: I'm a little foggy on the step by step process of performing a 1031 reverse exchange, and I'd appreciate some feedback. Here's my situation: My sister and I will be joint-venturing to purchase a commercial MF building this year. I need to sell a SFH that I own to help fund this deal, and for which I have a sizable gain. I don't like the idea of doing a forward exchange whereby I sell the SFH and then have a 45/180 day timeframe to close on the replacement property. To me this provides an incentive to buy an average deal just to fulfill the terms of the 1031. As such I'd like to pursue a reverse exchange, but have some questions about the overall process as well as the difference between a replacement property parked reverse exchange and a relinquished property parked reverse exchange.

What I'm having trouble with is how, in the relinquished property parked reverse exchange, things happen generally.  Here are some questions:

1. At what point do I relinquish title of the SFH to the EAT? After an AO on the MFH? At the closing table?

2. How does the EAT/Exhanger/QI apply the funds of the eventual sale of the SFH to the already purchased MFH?

Do you have an opinion as to whether or not one is generally more favorable/cost effective than the other?

@Jim K.

Mic drop

Appreciate the insights and healthful debate here...this is exactly why i started this thread.  Following and learning as much as possible!

Andy I'll shoot you a PM

@Jose De La Macorra

Don’t do it

@Mike Dymski

Thanks for the response Mike, I always appreciate your posts about focusing on the basics and not getting caught up in the noise. I do however have a question to pose (to anyone): How do you analyze large numbers of deals when there’s so few on the market? For example: I’ve been watching the SS space in Madison for around a year now, and I’ve seen one come on market. Just one. How do you get good metrics for your targeted area with no comps?

@Dustin Wiskes

In Wisco? I’d love to hear more about that. After hearing Brandon talk about them I will say that they seem to have some pluses for sure

@Danny Randazzo

Interesting, I’ll shoot you a message. Thanks Danny

Shane your comment on realizing that SFH is not the way you want to go is exactly where I'm at now

Thanks for the replies.  I've read AJ Osborne's book, Growing Wealth in Self Storage, which I really liked.  The simplicity of storage buildings is certainly attractive, for sure.  From what I've observed in my area (Madison Wi), there are very very few storage facilities that come up for sale.  Networking with existing owners might be a possible way to acquire.