“Seller is doing a 1031 to a larger property” - what does this mean?

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A 1031 exchange is a swap of one real estate investment property for another that allows capital gains taxes to be deferred

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It does not necessarily mean that the property they are selling is a “bad” one. It could mean they just want to “purchase” (or in this case exchange) their current property for a bigger one.

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This is just a way to legally avoid paying taxes.

This does not mean the property is necessarily a bad deal. You can choose to sell your house for multiple reasons. The most common I’ve found is a small investor is looking into getting into large properties or properties in more expensive areas. To do this they look at properties in their existing portfolios to sell. They’ll usually sell the properties they have the most equity in, or maybe multiple properties that perform the least out of their total portfolio.

None of that means that it’s a bad deal for you. Trust your due diligence and the due diligence of the people your hire.

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Thank you

Ahhh. Ok thank you

Why wouldn’t they just buy another one?

I thought the rules were changed to really clamp down on doing like for like, so maybe moving from a multi unit to an apartment building (both residential).

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