Reverse Exchange
A Reverse 1301 Exchange is the exact opposite of a Forward Exchange, as one might expect. A Reverse Exchange occurs when you acquire a new property (“replacement property”) before selling your old property (“relinquished property”). In other words, you’ll first acquire your new property and then sell your old property. These transactions can have require extreme capital requirements from the Taxpayer.
Because of the strategy and timeliness required of a Reverse Exchange, you’ll likely need a qualified intermediary to help facilitate the process. Your intermediary will advise you of the best time to buy, taking into consideration your current financial situation and future financial goals. They’ll also oversee your process to ensure proper communication and adherence to IRS requirements.
Why Choose a Reverse Exchange?
Although a reverse exchange requires substantial liquidity on your behalf, they can be accomplished, it can give you greater returns and allow additional time to make decisions. If you have the funds, you will see this and other advantages of a Reverse Exchange such as:
- Investing extra funds. This is a great opportunity to invest if you have funds other than equity in your old property so you can see a faster return on them.
- Strategy. A Reverse Exchange can act as a strategic tool that allows you to oversee and take advantages of changes in the market. A Reverse Exchange cuts down on your waiting period and allows you to make more “spur-of-the-moment” decisions, which allows for greater flexibility and clearer timeline.
- Opportunity. It goes without saying that a Reverse Exchange gives you opportunities other exchange types do not. By eliminating the delay of selling your old property, you get a prime—and quick—opportunity to act when the need arises.
- Timing. This can give the opportunity to the Taxpayer to ‘Buy low and Sell high’, taking advantage of valuations in market conditions.
Get Started on Your Reverse Exchange Today
If you have more questions about a Reverse 1301 Exchange or are ready to invest in one, contact the experienced staff at Prime West Exchange, Inc. Our team can help you determine if Reverse Exchange will be effective for your unique situation, and our experts can act as a qualified intermediary for your transaction. For more information, contact our office by phone today at (818) 442-2228.