The questions here were received from interested 1031 exchangers visiting my website. I have chosen to leave the questions intact with their ambiguity, shorthand writing and misspellings so as not to act on the assumption as to what when unclear the questioner meant.
A 1031 exchange isn't usually simple. There's a lot of learning and planning involved. You have a 45 day identification period for listing properties. There are an additional 135 day settlement time. Real estate is real estate and the 45 days is critical — if your identified properties all disappear you have no exchange. Preferably, identify and settle during the 45 days. That’s just some of the timeline rules and the IRS has mandated many other time relevant regulations for 1031 deals.
Yes, the IRS extended its 45 day identification period for events such as 9/11 and major stormdamage on the East Coast – but in general, these rules are pretty ironclad, so it pays to not mess around when you're trying to achieve a 1031 exchange deal.
However, there is some wiggle room in terms of writing a contract. Essentially, you can write a contract anytime before settlement on a replacement property in a 1031 exchange.
One of the key pieces is collaboration – you'll have to work with sponsors and other stakeholders to make the deal work.
This sort of convoluted program isn't likely to happen. There is a reverse exchange — given the expense of a reverse exchange it doesn't sound like this is going to fit into that classification.
So after closing escrow, you have a 45 day period to identify properties. It's important to have financing lined up and be ready to move quickly when escrow is closed. Sometimes you can try to delay closing escrow, but it's best to have all your ducks in a row.
Marilee Hill knows about 1031 exchange processes – as a 20 year real estate professional, she is able to help offer clients advice on exchange replacement properties and regulations such as reg D of the Security Exchange Act of 1933.
Marilee Hill is a registered representative with a series 7 license who can help with the preliminary work of understanding what to do with a 1031 exchange deal. Then there's a qualified intermediary service that generally charges $600-$1000 or more to help achieve the deal. Marilee Hill’s services, on the other hand, are free.