I worked recently with a client who had a million dollar plus multifamily asset who needed to sell because her partners were getting on in years and were restructuring their estate. She let me know that her proceeds needed to be reinvested immediately so as not to interrupt her income stream. I shared the concept of a 1031 Exchange which would allow her to defer capital gains tax but required strict adherence to the guidelines and timelines set forth by the IRS. She decided that this was the strategy that would be best for her partners and for herself moving forward.
I advised her to make arrangement s with a qualified third-party administrator prior to accepting any offer on the property. After we got her property under contract we immediately began the search to find the replacement property. According to the IRS requirements she had 45 days to identify her replacement properties and 180 days to close. At the end of the day we identified and closed on her new asset within 30 days. She was very happy and did not miss a day’s worth of income.
If you have questions about buying or selling commercial real estate, please contact me right away.
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