Question: I am selling five rental properties. I do not want to pay taxes on the gains. Can I take that money and reinvest in one rental property and then refi that new property to cash out the equity and avoid taxes? If so how long do I have from the time of sale to reinvest? Thank you for your replies.
Emmett Aguilar: Look into a 1031 exchange
Leslie Copeland: You can do a 1031 exchange into a new rental property but it needs to be of equivalent or higher value. So you will still have to take on an equivalent debt to what you have now. Then depending on LTV ratios, you should be able to refinance the property and free up capital. In theory, couldnt you simply refinance your current portfolio of 5 properties and pull the capital?
Landon Wade: 1031…..questions? PM me. You need to have a facilitator.
Erin Lyons: Its a 1031 exchange. You need to sell your current properties and reinvest quickly. Im not sure where you are, but find a good real estate broker in your area and they can help you through the transaction.
Logan Perkins: This is partially incorrect. You only have 45 days after you sell to designate a property and 180 days to complete the transaction or the capital gains will be owed.
Erin Lyons: You should come to the exchange having identified the property you want to buy and get it all closed in under 6 months.
Kali Walton: You need to do setup the 1031 BEFORE you sell any of the properties and you have 45 days to identify new properties and 180 to close. I would talk to Bill Exeter at Exeter 1031.
Harper Burns: As long as you buy something equivalent or more expensive then what you are selling yes.
Harper Burns: Also if you can pm me addresses I have somebody interested in Texas to purchase all of them at once
Dallas Baker: I have TX property too.
Alejandra Matthews: With a 1031, can you split the proceeds for down payments on more than one property, or does the money need to go to one property only?
Alejandra Matthews: Why the mad face, Hunter Ward:? I was simply asking a question of which I dont know the answer.
Emmett Aguilar: Yes, you can. I had a client sale one property all the funds with to the 1031 and they purchased 3 new SF rentals with 80/20 conv. Loans and use the 1031 as the down payment on all 3 properties. The last property they purchase they use the remaining 1031 funds so the down payment was more than 20%. We sold their property first and then started looking for new ones
Hunter Ward: Alejandra Matthews: I didnt know I had pressed that… Oooppps.
Colette Moss: Yes Leslie Copeland: you are correct.
Rory Greer: Go to a 1031 class .
Erick Wallace: You typically have 45 days to identify a list of property for your 1031 exchange. Where are the property you are selling located? Exchanging is not easy, high stress, so strongly suggest you find someone experienced to a) complete exchange b) properly id and get into contract your upleg. There are tricks of the trade, a commercial agent who is experienced should be used and will prove their worth in gold!
Johanna Chandler: Would you consider being the bank on the 5 properties that youd like to sell?
Brantley White: We tried a 1031 exchange 2 years ago and missed the deadline by 11 days. Sucks that you cant request for an extension. I would recommend looking for the property first before you sell.
Judah Frazier: Are you planning on 1031 exchanging into 5 buildings? Dont think you can 1031 exchange 5 into 1 or 2 unless Im mistaken.
Wesley Price: You can exchange 5 to 1
Malaysia Pittman: 1031
Camden Watts: Stacey, go to a site like IPX1031.com. They generally will have the rules of a exchange spelled out in fairly simple language. If you dont understand, call them. They will give out advice / information for free in trying to win your business. Yes, you can sell more than one property and exchange into just one ( am doing that exact thing on Feb. 7th). Yes, you can sell one property and exchange into more than one. I think the limit could be 3 properties, but ask the experts on that.
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Nicole Armstrong: Thanks everyone for the advice! I really appreciate you taking the time to help me.
Miranda Duncan: 1031b exchange Ask your usual title company who they would recommend to administer.: you will have to roll over the complete amount that you sell them for including any out of pocket money. Last time I did one I had 45 days to locate next properties and another 80 to close. It has to be equal or greater value of your sale.:
Camden Watts: I believe the days are incorrect.
Ashton Huff: You would have to do a 1031 exchange
Annabella Francis: Do a 1031 exchange,just like in monopoly,change your green houses for a red hotel.