Free Guide to 1031 Exchanges

How to Find 1031 Exchange Real Estate

There are several things to consider when attempting to find 1031 Exchange real estate within the time frame set forth by the IRS. Making decisions about location and the type of property you wish to purchase is vital. Once you've narrowed down your search in this manner, a real estate professional should be contacted to help you locate a property.

A 1031 Tax Deferred Exchange is a real estate transaction that involves using the proceeds of the sale of one investment property to purchase another while deferring capital gains taxes. Once you decide that using a 1031 Exchange is the right move for you, you need to start considering potential investment properties to purchase. It's important to keep in mind that once you've put a 1031 Exchange in motion and have sold your initial property, you have only forty-five days to identify possible replacement properties, and only one hundred and eighty days to make the purchase. Therefore, it's of the utmost importance that you have a plan in place to find a replacement property to complete the 1031 Exchange.

The first step in finding a 1031 Exchange property is deciding on the type of property or properties that you want to purchase to replace the property you are selling. A large part of making this decision involves considering your long term goals. It's time to ask yourself some questions. How long are you planning on holding on to this investment property? How much time do you want to spend managing your property? Do you want to be a landlord? Do you want to develop some land or run a small business? How much money do you have to invest in an exchange property? The answers to these questions should point you in the right direction in terms of choosing the type of property in which you want to invest. Taking the time before you start the 1031 Tax Deferred Exchange process to contemplate your goals can aid you a great deal in finding a property.

Once you've decided on the type of property you wish to invest in, it's time to start thinking of the location of the 1031 Exchange property. Look at real estate markets in different areas. Consider factors such as how close you need to be to manage your property, the variations in property values between different areas, and the availability of the type of properties you are interested in to assist you in deciding on the best location to purchase your next 1031 Exchange property.

Once you know what you are looking for and where you want to begin to search, it's time to call in a professional. Make sure that the real estate professional you hire is experienced in commercial real estate. Ideally, this person should specialize in aiding investors identify replacement properties for a 1031 Tax Deferred Exchange. A 1031 Exchange real estate professional will use your insights into the type of property you are looking for and the location you are interested in to narrow down your search and find a replacement property within the time constraints of the 1031 Tax Deferred Exchange.

It's obvious that investors need to have a plan of action in place to find a replacement property prior to beginning the 1031 Tax Deferred Exchange process. Deciding on the type of property in which you want to invest and a location are key to finding the property that will work best for you. Once you've made these decisions, a real estate professional experienced with the 1031 Tax Deferred Exchange process can help you locate the perfect property.