The Planning Phase consists of several steps. The first step in completing a Section 1031 Exchange with Courtlandt1031 as your partner is to conduct a complimentary Section 1031 Exchange Needs Analysis, where we gather a clear understanding of your financial and real estate investment objectives, including immediate and long-term needs.
The next step in the Planning Phase is to conduct a brief interview with a Courtlandt1031 Exchange Expert. This may be conducted in person at our Southern California offices, or via a phone or video call. Your Exchange Expert will help answer any questions as well as clarify any issues identified on your questionnaire.
The final Planning Phase step is to review a preliminary exchange assessment, as produced by your Courtlandt1031 Exchange Expert. Your preliminary assessment may include:
☑ Valuation of current properties
☑ Opportunity cost analysis
☑ Review of exchange needs
☑ Costs / Benefits of exchanging
☑ Strategy for moving forward
(aka Relinquished Property Sale or “Down Leg”)
While it may seem counterintuitive, the first few steps in the Property Disposition Phase is to develop a replacement property plan and conduct a preliminary search for replacement options. Once we’re confident that suitable replacement opportunities exist, Courtlandt1031 creates a comprehensive strategy to market and sell your property. Key steps include:
☑ Develop property acquisition criteria
☑ Confirm availability of desired replacement property
☑ Execute Buyer Representation Agreement (if applicable)
☑ Create marketing plan
☑ List property for sale
☑ Market property
☑ Identify qualified buyer
☑ Assure proper contract and escrow language
☑ Open Down Leg escrow
☑ Close Down leg escrow
☑ Transfer sale proceeds directly to qualified intermediary
(aka Replacement Property Purchase or “Up Leg”)
A list of potential replacement properties is created during Phase 2. By the time the Down Leg escrow is nearly closed, The Property Acquisition Phase begins with due diligence on the top replacement property candidate. At the same time, “safety net” replacement properties are sourced. All activities are closely managed to help ensure that none of the Section 1031 Exchange deadlines are violated. Property Acquisition Phase steps include:
☑ Complete replacement property due diligence
☑ Identify and secure replacement properties (“safety net”)
☑ Open Up Leg escrow
☑ Meet 45-day replacement property identification requirement
☑ Complete due diligence and financing
☑ Purchase replacement property and close Up Leg escrow. (This must occur within 180 days or the tax filing date for the year in which the property was sold, whichever comes sooner.)
Once an exchange has been completed, your Courtlandt 1031 Exchange Expert will periodically conduct reviews on your investment properties, as well as update your Real Estate Financial Plan. When appropriate, you and your Courtlandt 1031 Exchange Expert may begin the exchange process again.
Where are you in the Section 1031 Exchange lifecycle?