When completing a tax-free exchange the most important thing is to find your 1031 exchange properties. The reason this can be so difficult is because of the limited time frame you have them make a decision on your new piece of real estate. So let’s take a second and look at some ideas for exchanging your properties in a like kind exchange.
It is highly recommended when completing a starker exchange to make sure that you’re planning on your new real estate purchase before you have sold your previous property. The reason this is so important is because once your property has been sold, be it a commercial strip or a rental house, you will have only 45 days to identify a new commercial property to purchase. Now don’t panic I’m not saying you only have 45 days to exchange properties, the tax law simply requires you to identify a possible exchange property within that time for. This means you can actually identify several different new pieces of real estate as the potential exchange property.
In reality you have 180 days before you need to take ownership of the property to you they exchanged into by doing the 1031 tax-free exchange. And while 180 days may sound like a lot of time, when it comes to commercial property and rental property you need plenty of time to do your due diligence and make sure that your new real estate investment will meet all of your cash flow goals and has been properly maintained. So it is always recommended that you already have an idea of the property you would like to exchange into before starting your starker exchange and before the closing of your original property. Does that make sense?
As you can see finding 1031 exchange properties is very important to get the most out of your tax free exchange. Do your research and you will be very happy.
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