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1031's are a pain in the butt. They close, but it takes all the planets lining up at the exact same time. That can be problematic as you are dealing with multiple parties and they all have to close within hours of each other.
The bolded is not true and in my experience, 1031 sales are no more likely to be a pain in the butt than any regular sale with a mortgage.
I assume the difficulty has to do with the need to occupy. Is 1031 a good option for vacant land swapping? (Which I would like to do).
Yes you can do a vacant land swap. 1031 is for investment real estate, and the rules say "like for like" but the IRS is very stretchy about what qualifies as "like property". A surprising amount of different stuff can be used for a like kind exchange.
There isn't anything in the 1031 about occupancy other than owner-occupied property does not qualify.
If you would like to do a 1031 exchange, find yourself a qualified accomodator and they will explain to you what you can and can not do.
The sticky part of the 1031 exchange is that the time periods allowed are completely rigid, no exceptions, and you have to move at a brisk pace to get it all done on time.
We did one several years ago, the time frames weren't too bad if you've got the replacement property lined up ahead of time. If you have to take time to find the replacement property, then time frames could get dicey.
1031's are a pain in the butt. They close, but it takes all the planets lining up at the exact same time. That can be problematic as you are dealing with multiple parties and they all have to close within hours of each other.
Wrong, 1031s can be the easiest of all exchanges. There are two types, a straight exchange and one using an accommodator.
I was an investment real estate broker many years from 1972 until I retired. I did hundreds 1031s, and never had a problem closing even one.
They were all over USA and as far away as property in Costa Rica. As many as with 7 different sellers involved.
Problems occur, when some agent, attorney, title company, etc., does not really understand 1031s, and how to properly handle things. But when they are put together by people that know what they are doing, they are about as easy as is possible to handle real estate transactions.
I didn’t even realize there was such a thing as 1031 exchanges outside of commercial real estate, so that’s cool. We do this fairly often, like senior living buildings 1031 exchanged for commercial office buildings or whatnot. That speaks to the above, the IRS doesn’t care about “like for like” as far as usage at all. It just matters that you’re exchanging for something usually more expensive than what you sold, so it usually for investment properties means adding dollars on the back end. Sometimes it can be substantial because you do have a limited time window so have to make a deal and make something work.
I assume the difficulty has to do with the need to occupy. Is 1031 a good option for vacant land swapping? (Which I would like to do).
1031 exchanges have nothing to do with occupancy requirements, as it only involves investment property, which can be Rental Homes, multi family, commercial, industrial, vacant lots, land, etc. etc.
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