A delayed exchange is the most common exchange. The Exchangor first sells their property (the "Relinquished Property"), the Qualified Intermediary facilitates the sale and holds the proceeds for up to 180 days while the Exchangor works to acquire a replacement property. While seemingly simple, strict timelines and identification procedures are required. The Exchangor only has 45 days to identify a replacement property and 180 days to close escrow. The Exchangor must use a Qualified Intermediary to prepare exchange documents, facilitate the sale and purchase of property, and mange the sale proceeds that will be used to acquire the replacement property.
A reverse exchange occurs when the Exchangor purchases the Replacement Property before selling the Relinquished Property. An Exchange Accommodation Titleholder is required because the seller cannot hold title to both the Relinquished Property and the Replacement Property at the same time. This is typically accomplished using a single member LLC. Growth 1031 will create the LLC and serve as the Exchange Accommodation Titleholder (EAT), holding the property for the Exchangor's benefit. Reverse exchanges typically require the Exchangor to purchase the property in cash or using a hard money lender as traditional funding is not typically available to the EAT.
Contact us today with any exchange questions you may have. We would love to help you find answers to questions like:
Does my property qualify for a 1031 exchange?
How can I begin the exchange process?
At what point should I find an accommodator?
What are the time requirements?
Can I identify more than 3 properties?
How many replacement properties can I purchase?
What does "like kind" mean?
Do I have to reinvest all of the proceeds?
Call or email us today or fill out the questionnaire below to receive a call back.