So, we knew we had to do a exchange. This option is completely okay, and often used when a seller wants to make some cash, and is willing to pay some taxes to do so. Open a Exchange. There are two parking approaches for completing a Reverse Exchange: For those of you who are more experienced, take some time to get a solid understanding of rules and regulations.

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Equity Advantage is the sole member of the LLC and the relinquished property will become its sole asset.

Deciding which property either the replacement property or relinquished property is parked is determined by considering a number of factors: This brochure is very comprehensive, contains hyperlinks to key tax code sections and provides useful guidance to property owners, real estate professionals, closers, attorneys and CPAs in resort communities and vacation home marketplaces throughout the United States.

The sale proceeds are then used to payoff loans incurred by the LLC. Thank you for a wonderful experience!

Acquiring Multiple Replacement Properties

But, if you own a rental property that is worth significantly more today than what you or the original owner purchased it for, you can make a killing using this powerful strategy. At the time of closing, title of the relinquished property will be transferred from the LLC to the buyer and the sale proceeds will go to Equity Advantage as they would in a delayed exchange.


Traditionally, a exchange is where one property is literally swapped for another property of like-kind. Therefore, the smllc may sell the original property, and that sole member may purchase the new property in their individual name.

Thanks to Section of the US tax code, she could exchange those properties tax-deferred for 1. However, the exchange rules require that both the purchase price and the new loan amount be the same or higher on rfplacement replacement property.

When investor-clients and other real estate professionals ask who I recommend to facilitate a exchange, I will enthusiastically say — Replacemeng Preservation. You can actually retire today. The property is transferred to an exchange accommodation titleholder EAT. This completes the acquisition of your exchange. Additionally, the Exchangor cannot receive property already owned as replacement for property to be relinquished.

Understanding Reverse Exchanges – Do You Qualify?

Replwcement Turner from Bigger Pockets explains that this strategy has more benefits than just saving yourself from taxes. The relinquished property is sold and the proceeds from the sale go to Equity Advantage. As the name suggests, these closings occur in a simultaneous fashion. But eventually we trusted them.


Every one of them has been a “10” experience. Hopefully, you now realize how important it is to understand the intricacies of real estate investing, real estate market cyclesand growth opportunities before you even think 103a1 getting started. In theory, this type of exchange is very simple: Fortunately, Jill listened to me and took the leap, and the results were astounding.

Customize a Handout Ask a Question. Important Takeaways Do you feel inspired now?

We would be delighted to use API again and also recommend the firm to others. But if we did sell it, we would have to pay a pretty hefty capital gains tax. Negotiate terms of the purchase Sign a purchase agreement. Read The Full Article. Our exchange paperwork was flawless and always on time.

Equity Advantage provides information to make sure an exchange is beneficial to you. Establish an replacemetn with Equity Advantage: For example, perhaps you are investing in properties that are low-income and thus high-maintenance. Repladement costs, such as inspections and broker fees also apply toward the total cost of the new property.