1031 EXCHANGE TIMELINE AND FAILED EXCHANGES
Unfortunately, it is not uncommon for 1031 exchange investors to chase down potential replacement properties, only to have the deal collapse at the end of the 1031 exchange deadline. The potential reasons for this are limitless. For example, maybe the seller gets a better offer at the eleventh hour and walks away, leaving you stranded with days—not weeks—to regroup. Maybe the inspection comes back with a laundry list of nightmares like foundation cracks, a roof
leak, or even toxic mold. Maybe the appraisal comes in low and the lender pulls the plug, or the zoning board throws a last-minute curveball that turns your dream deal into a regulatory minefield. It's in these moments that the clock starts to feel less like a countdown and more like a ticking time bomb. That's when the panic really sets in. And panic, as any seasoned investor knows, is the enemy of good decision-making.
PANIC, AS ANY SEASONED INVESTOR KNOWS, IS THE ENEMY OF GOOD DECISION-MAKING.
SOME DANGERS OF SCRAMBLING FOR A REPLACEMENT PROPERTY
When the 45-day window is closing fast, otherwise rational investors start making irrational moves. The pressure to complete the exchange by any means necessary leads to a series of dangerous mistakes.
Kay Properties & Investments has helped more than 4,000 investors complete over 10,000 1031 exchange Delaware Statutory Trust investments, and so we have seen how panicked 1031 exchange investors can fall into some of these preventable traps.
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