Carmon Middleton Real Estate

PLANNING TO SELL AN INVESTMENT PROPERTY?

Learn about the 1031 exchange process before the property closes — not afterward.

Before a potential exchange, it can help to:

✓ Talk with your tax professional
✓ Involve a Qualified Intermediary
✓ Define your replacement-property criteria
✓ Watch the market
✓ Coordinate your real estate, tax, exchange, financing and closing professionals

You don't need to become a 1031 expert.

You do need enough information to understand the process, ask better questions and know which professionals you'll need.

I created my FREE 1031 Exchange Beginner's Guide to give real estate investors a straightforward place to start.

Comment “1031” and I’ll send you my FREE 1031 Exchange Beginner’s Guide.

A 1031 EXCHANGE TAKES A TEAM

Your REALTOR®, Qualified Intermediary, tax professional, lender and title or closing professionals don't all perform the same job.

But they may all play an important role in getting your real estate transaction and exchange coordinated.

The REALTOR® helps with the real estate strategy and property search.

The QI handles exchange mechanics.

The CPA or tax professional addresses your individual tax situation.

The lender handles financing.

Title or closing professionals help coordinate the real estate closing.

Getting the appropriate people involved before your current investment property closes can help everyone understand the intended transaction.

Plan early. Coordinate early.

START WATCHING THE MARKET BEFORE YOU SELL

If a 1031 exchange may be part of your investment-property sale, start watching potential replacement properties early.

You can learn a lot before ever writing an offer.

What's available?

What price ranges are realistic?

How much inventory actually fits your investment criteria?

Are the opportunities you expected to find really on the market?

For Houston and Greater Houston real estate investors, early market research can help set realistic expectations before the current property closes.

The replacement-property search doesn't have to start with an offer.

It can start with information.

WHAT DO YOU WANT TO OWN NEXT?

Before selling an investment property through a 1031 exchange, start defining what you're actually looking for in a replacement property.

Think about:

• Property type
• Location
• Price range
• Financing
• Investment objectives
• Features that matter to your strategy

You don't necessarily need to have the exact replacement property selected.

But knowing your criteria before your current property closes can turn a wide-open property search into a focused investment strategy.

If you're searching for investment property in Houston or Greater Houston, understanding your goals first can make the real estate search much more productive.

GET YOUR QI INVOLVED BEFORE CLOSING

Considering a 1031 exchange?

Your Qualified Intermediary should be part of the conversation before your relinquished investment property closes.

The exchange needs to be structured appropriately before closing. Receiving the sale proceeds yourself and deciding afterward that you want to turn the transaction into a 1031 exchange can be too late.

Your QI handles the exchange mechanics while your REALTOR® handles the real estate side of the transaction and replacement-property search.

Early coordination matters.

TALK WITH YOUR TAX PROFESSIONAL EARLY

Just because a 1031 exchange may be available doesn't automatically mean it's the right strategy for every investor.

Before building your sale around an exchange, talk with your CPA or tax professional about your individual circumstances and goals.

Your REALTOR® can help with the real estate strategy and replacement-property search. Your Qualified Intermediary handles exchange mechanics. Your tax professional evaluates the tax consequences for you.

Different professionals. Different responsibilities.

Getting those conversations started before selling your investment property can help you make a more informed decision about what comes next.

General educational information only. Consult qualified tax and legal professionals regarding your individual circumstances.

REPLACING YOUR RENTAL? SHOP BEFORE YOU SELL.

Thinking about selling a rental or investment property and using a 1031 exchange?

Don't wait until the property closes to start thinking about what you may want to buy next.

A successful 1031 exchange often starts before the sale. Researching potential replacement properties early can help you understand what's available, what fits your investment goals and what you may need to prepare before your current property closes.

For investors in Houston, Spring, Klein, The Woodlands and throughout Greater Houston, the takeaway is simple:

You don't have to choose your replacement property before you sell, but you can start shopping and planning.

Want a clearer starting point for understanding a 1031 exchange?

A 1031 exchange can feel complicated when you are trying to sort through property rules, deadlines and next steps.

That is why I created a plain-language beginner’s guide for real estate investors.

It explains the foundation so you can ask better questions before you sell.

Comment “1031” and I’ll send you my FREE beginner’s guide.

Vacation homes, mixed-use property, changed-use property and property acquired primarily for resale require closer professional review.

Some properties need a closer look before anyone assumes they qualify.

Vacation homes, mixed-use property, changed-use property and property acquired primarily for resale can raise additional questions.

This is where early guidance from a Qualified Intermediary and tax professional becomes especially important.

If you’d like the beginner’s version, comment “1031” and I’ll send you my FREE guide.

The property must be held for investment or business use. A primary residence generally does not qualify.

Property type is only part of the analysis. How the real estate is held matters too.

Investment or business-use property may potentially qualify. A primary residence generally does not.

The facts and the owner’s purpose should be clear before an exchange begins.

If you’d like the beginner’s version, comment “1031” and I’ll send you my FREE guide.