Why you can’t get your prospect to list that property (and what you can do about it)
Why can’t you convince your client to list their property w i t h y o u ? Y o u k n o w the one. The highly app r e c i a t e d p r o p e r t y that they’ve o w n e d f o r years, and that’s been fully depreciated. You’ve told them about all of the great resources you have to market that property and secure the best price for them, and that transaction will require that prospect to reinvest in replacement real estate in a very short period of time. In fact, when engaging in a 1031 Exchange, they must identify their replacement real estate within a strictly enforced time period of 45 days from the date of their relinquished property closing or lose the opportunity for tax deferral under Section 1031. Reinvesting in real estate under these conditions, and paying inflated acquisition prices for their replacement property, could be counter intuitive to your prospect’s goals and, therefore, even a 1031 Exchange may not be an attractive or useful solution for them.