1031 Property Exchanges for Orange County- Step One

Get a Qualified Intermediary - Do Your Documentation Correctly.

The first requirement is that the property being sold AND the new property be what used to be called “like-kind.” Like-Kind, however, does not mean that the two properties both have to be the same type, ex. apartment units for apartment units, rented storefront to rented storefront, rented residence for rented residence.

It really refers to the USE of the property. To qualify as like-kind, the property just has to be income producing.

You could sell a rented home and buy a tri-plex. You could sell a warehouse and buy a lumber yard, or two condos, or four houses, whatever.

Like-kind relates to the USE of something, not what it looks like. or how it is described or where it is. Raw land is a bit different, though. It always qualifies for 1031 even if it is not leased or rented out by you.

As long as the item was not your primary residence, you can generally qualify it as a like-kind property for 1031 purposes.

Of course, there are fine print considerations, but this is a general description of what constitutes a 1031…go on to Step Two, Three, and Four now.

But I am no tax advisor, so be sure to consult your CPA, certified property exchangor real estate agent, Attorney or a financial advisor before starting.

Certain documentation must be prepared by knowledgeable consultants before you sell the first property.

See my 1031 property exchange section of my 900-page web site for more information and links.