Maximizing your 45-Day Identification Period

Posted by Margo McDonnell | Tue, Jul 10, 2012
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It is true that 45 days is a very short period of time - especially when you have to determine the property or properties you want to identify for your 1031 exchange. If you closed on your relinquished property today, your 45th day will be August 24th and there is no doubt those 6.5 weeks will fly! However, wise investors take advantage of the time they have between the date the Agreement of Sale with the buyer was signed and the actual closing date. This period of time is usually between 30 – 90 days and will “extend” your identification period on the front end without the pressure of the clock ticking.

When you find that replacement property, there is no reason you cannot enter into an Agreement of Sale with the seller. You just have to be sure the closing will not be scheduled until after your relinquished property is conveyed to your buyer. If you take money out of your pocket to pay the earnest money deposit, assuming you have enough exchange funds, you can request to have the deposit refunded to you when you acquire the replacement property. Your exchange officer will work with you on the earnest money deposit. 

To determine your 45th day, use our 45/180 calculator.

Topics: 1031 Exchange, 45-Day Identification Period, identifying 1031 replacement property

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