The Reverse Exchange and Supporting Market Conditions
The value of an IRC 1031 Exchange is often found in the replacement property. In order to meet the expectations of each investor, diversity within a real estate portfolio is necessary. Most investors consider multiple properties before narrowing down their selections to a few fortunate enough to pass their inspection. Due diligence is further done to ensure the asset is strong and accurately reported. During this process investors consult a team of professionals including their CPA, attorney, agent, and lender for additional insight regarding their pipeline. Du
ring this process the use of a traditional delayed straight-forward exchange may not be ideal. Market conditions may prevent an investor from finding a property within their strategic and financial criteria in the 45 day window allotted. Exchange Resources believes this is especially true if market conditions have high demand with low supply. Imagine selling a property and only having a few choices of potential replacements. In this situation a reverse exchange may prove more beneficial for the investor, allowing them to capitalize on their best friend “opportunity”. The perfect investment opportunity is difficult to forecast. Exchange Resources encourages investors to position themselves well in their target markets in order to be best prepared when a property presents itself. Consulting a professional on the necessary safeguards will be essential to a successful reverse exchange.
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