1031 Facilitators, Inc.

 

 

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REVERSE EXCHANGE 

A reverse exchange is sometimes required where properties are unique or when the local real estate market is hot. We attempt to avoid this type of exchange whenever possible since it is more complicated and expensive. In the reverse exchange, your replacement property is acquired prior to the sale of your existing property. There are two types of reverse exchanges depending on whether the replacement or relinquished  property is “parked” by the qualified intermediary. Both of these transactions can be accomplished under specific regulations, but in this case you would have 45 days to identify the property to be sold and 180 days to sell it. (Both periods start from the date of the initial transaction.) We will form a single member limited liability company to hold the parked property and will convey this company to you at the end of the exchange.

If you need more than 180 days to complete the transaction, this may be possible with a “non-safe harbor” exchange. This exchange will require assistance from legal and tax specialists and brings both additional cost and risk to the exchange.

If you need help with a reverse exchange, please call us at 956-546-1031, or email Tom Sarytchoff. After discussing the transaction with you we’ll forward our engagement letter and exchange contract.