I need to use an LC, as I have a HELOC that can’t be subordinated, and I want to continue using it for a bit.
From what I have read, I think that an LC is both “seller financing” and a “sale.” I could be wrong. Let’s put it to a vote!
I may well have used the term “boot” incorrectly, but I do think that the unexchanged equity that I will be financing will be taxable. I know the interest-only payments will be.
My QI is charging $400, which seems reasonable to me.
Bottom line is that I have an extremely motivated buyer with 60% percent down now and I have a darn good deal on a replacement property on contract now. I need to close ASAP.
So are there any 1031 exchange experts who can give me some advice?
I am selling via a land contract a half duplex/townhouse that I’ve owned for 13 years. The LC was not my first choice, but it has turned out to be the best way to sell to this buyer, who is my best prospect. (She owns the other side and wants my side more than anyone else–including me.)
My question is what are the ramifications of using a land contract in conjunction with a 1031 exchange?
I’m getting a substantial (60%) down payment, which I intend to exchange into a replacement property. The balance will be taxable boot, I’m told, but that is not a problem, this year.
My QI sees no problems, but I am interested in other opinions.