How Can I Structure My 1031 Exchange?

For both new and even experienced investors, handling and structuring a 1031 Exchange can seem daunting. But at Coakley Realty, our experts are devoted to helping you learn the simplest, most effective ways of getting it all taken care of. Today, we’ll go over the ways to best structure your exchange in order to maximize your protection and potential growth!

Coakley Realty has been your partner in real solutions and services for years. Each and every member of our team is a devoted specialist, boasting years of experience and extensive knowledge of realty and modern markets. When it comes to your 1031 Exchange, no one can help like our team.

Need help structuring your 1031 Exchange in Maryland, or looking for sound advice and guidance? Contact Coakley Realty today!

Structuring Your 1031 Exchange

There are many avenues to take when structuring your 1031 Exchange, and which method suits you best is going to depend on a variety of factors. This is why we typically recommend that you work with an expert. Professionals carry years of experience, and can help you identify the option that will provide you with the most overall benefits.

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Standard or “Delayed” Exchange

A Delayed Exchange is the most commonly sought and simplest of 1031 structures. In this system, the Exchangor (you) relinquishes the property first, and then later acquires a replacement. Put simpler, your current property will be closed first, and then the wanted property is gained within a short, stipulated delay.

Improvement Exchange

An Improvement Exchange operates much in the same way as a traditional Delayed Exchange, with one major difference: the investor may utilize excess funds in order to improve or update the replacement property before its acquisition. This option allows the investor the opportunity to customize the replacement property, and is another very popular structure type.

Personal Property Exchange

Personal Property Exchange (PPE_=) is simply a lesser known but equally important type of exchange. In this structure personal property that is not real estate is utilized. These properties can vary considerably, including but not limited to tangibles like livestock, art, or aircraft, and also intangibles such as copyrights and business licenses. In a PPE, these assets are exchanged for assets of the same type.

Simultaneous Exchange

These operate, again, quite similarly to a Delayed exchange, except, of course, without the delay. In a Simultaneous Exchange, the relinquished property is closed at the same time as the gained property.

Reverse Exchange

Reverse Exchange allows the investor to acquire and close on the replacement property before the sale of the relinquished property. This is a fairly uncommon structure, and can be somewhat risky without the assistance of a qualified arbiter. It is important to note that the investor cannot under any circumstance hold both properties simultaneously.

Need help learning more about 1031 Exchanges, or looking for professional assistance in structuring yours? Connect with the experienced agents at Coakley Realty in Maryland!