When a Reverse Exchange is the Answer
A Reverse Exchange is different from a 1031 Exchange in that it allows you to purchase property first, then sell your existing investment. Reverse Exchanges are typically used in the following situations:
• The owner of investment property listed for sale finds the ideal replacement property before finding a buyer for the exchange property.
• After substantial real estate appreciation, the common complaint is lack of inventory; therefore, the real estate investor needs to purchase prime real estate as it enters the market.
• Real estate sellers are confident in being able to sell their exchange property but wish to avoid having to identify the replacement property in the 45 days required by a 1031 Exchange. Therefore, they purchase model replacement property first.