Posted by John Merchant on July 12, 2005 at 18:32:03:
Call one of the 1031 Facilitator companies in your yellow pp or online and run this by them.
1031 rules say that seller can, using a 1031 procedure, then buy any other “like kind” property (i.e. any other RE if it’s RE that you sold for a gain) within 6 months after the first sale.
A registered bonded 1031 “facilitator” has to hold the funds and you can’t legally touch the money until after it’s spent on the new replacement property.
So yes, foreclosure auction sales could work if you can work out having the facilitator on hand ready to hand over the cash.
I want to sell a rental property I have and use the proceeds to buy a foreclosure at the trustee’s sale. Since the trustee requires all cash and I can’t touch the porceeds from the relinquished property, how can this be done? If it can be done.
This can be done, but it has complications. The Accommodator/Qualified Intermediary is required to assign into the replacement property transaction and quite often the trustee sales process does not have adequate documentation to allow the Accommodator to effectively assign into the transaction. I would be happy to discuss the specifics further with you.