We both lost out to someone that was willing to give the Seller almost the price they were asking because they were doing a 1031 exchange were they had a substantial amount of cash and they liked the property location.This similar scenario has played out for me several times over the last few years because the market was so hot.

and would like to do a 1031 exchange to avoid cap gains taxes. 

In most cases, I bring a printed lease when I exchange keys for payment, have them sign it, go home and make them a copy, and then either mail them their copy or drive it back over.

Just to clarify, I believe you have to actually own the property for it to be your homestead so unless they bought the house they moved into as tenants in common before the marriage, they would have needed to exchange deeds after.

After well over 1000 houses it’s proved it’s worth.BUT if you think sugar coating will work sprinkle sugar all over the conversation. certainly nicey nice communication and unabashed laughter will get you elected but it won’t buy many houses. our product is money and we best not forget that. there’s a power exchange happening in every conversation and the one who blinks first fails unless winning isn’t important.  

And I'd happily take it, knowing it's above market price, in exchange for my cash back.But if you're trying to pull off a fix-and-flip you need to be realistic.

Speak to your attorney but the lease is most likely invalid because there was nothing exchanged. as mentioned i typically either get deposit and security at signing or have language in lease the lease is not valid until that term is met.I would send a lettter noting we have not heard from you and are canceling the agreement.

I can't do a 1031 exchange since all the ones I am looking at after this are sub 200k purchase prices.

Since you are an active service member the IRS will allow you to have lived in the property for two out of the previous ten years of owning it. you'd just want to verify with your accountant that you qualify for these extensions.Since you converted the property to investment, you may also take advantage of doing a 1031 exchange when you sell.

Nickerson added “exchanging” real estate to upgrade to larger holdings without paying capital gains tax to his formula, and a number of other books were written about the subject in the next 10 years.