We, at FAI Exchange, have always helped accredited investors to invest real estate through Delaware Statutory Trust. We also help the investors by informing them about different aspects of 1031 exchange.
Through this blog post, we discuss some essential tips you should know related to 1031 tax deferred exchange.
Dont forget the expenses
You can pay some expenses with the exchange proceeds. These expenses include escrow fees, transfer tax, brokerage commissions, and exchange fees. This will not affect your deal in terms of tax-related benefits.
Ensure the proceeds are safe
The funds you receive after selling the relinquished property are held by an intermediary till you acquire replacement property. Check how this party is holding the funds. Check the account type the intermediary is using for keeping the funds. You must also ensure that the intermediary you have selected is reputable and financially stable.
The documents should be signed before closing
Exchange documents such as agreement between intermediary and real estate investor, notice to the buyer, etc. should be should be signed before closing on the replacement property.
Purchase enough replacement property
The replacement property you are acquiring should be of equal or greater value than the property you have sold. All the net equity you have received from the sale should be invested into the purchase.
If you are seeking right real estate investment for your exchange, contact us for Delaware Statutory Trust (DST) properties. There are various other benefits of DST properties that individuals are unaware of.