From 1031 Exchange to Hybrid Rental: A Step-by-Step Journey

This blog post, outlines the key milestones of a recent real estate transaction where we sold a property using a 1031 exchange and purchased another with the intention of creating a hybrid rental. This journey highlights the process from evaluating properties to the final listing, including negotiations, inspections, and preparing the new property for rental.
Whether you’re a seasoned investor or just starting, this detailed timeline offers valuable insights into executing a strategic property sale and acquisition.

Timeline

19

Evlautaion

Aug. 19 2024: Multiple properties evaluated, 5 walked by our local agent, and 3 full walkthrough videos generated.
26

Closing

Aug 26 2024: 1031 house sold-closed.
27

Property Review

27 Aug 2024: Another qualified house walked by our agent, and a full walkthrough video generated.
28

Reviewing

Aug 28 2024: Team and buyer evaluated findings, budget, and determined next steps.
29

Offer

Aug 29 2024: Cash offer submitted, $19,000 below asking.
30

Negotiating

August 30 2024: Counteroffer accepted, $11,500 below asking.
3

Under Contract

September 3 2024: Officially under contract.
5

Inspection

September 5 2024: Inspection completed. Post inspection video.
6

Post Inspection

September 6, 2024: Team and buyer evaluated inspection findings and determined next steps.
8

Renegotiation

September 7-8 2024: Post inspection renegotiations with seller. Another $2,500 price reduction was agreed in lieu of few inspection issues – the total is $14,000 below asking.
10

Intial Walkthrough

September 10, 2024: Agent/Project manager + designer + electrician + handyman walkthrough – VIDEO + short punch list
16

Bids Presented

September 16, 2024: Design and furnishing offer was presented to buyer
17

1031 Progress

September 17, 2024: checking last items with title, 1031 QI, and attorney to make sure we are ready to close.
20

Closing

September 20, 2024: Purchase closing
21

Prep Work - Start

September 21st: misc. (and minimal) rehab work, furniture, and furnishing purchase + installation, final touches.
17

Prep Work - Finished

October 17, 2024: work completed
20

Photography

October 20, 2024: Photography and final prep for listings
23

Listing for Lease

October 21st-23rd: listing on multiple websites

Key Milestones

  • August 19-25: Multiple properties evaluated, 5 walked by our local agent, and 3 full walkthrough videos generated.
  • August 26: 1031 house sold-closed.
  • August 27: Another qualified house walked by our agent, and a full walkthrough video generated.
  • August 28: Team and buyer evaluated findings, budget, and determined next steps.
  • August 29: Cash offer submitted, $19,000 below asking.
  • August 30: Counteroffer accepted, $11,500 below asking.
  • September 3: Officially under contract.
  • September 5: Inspection completed. Post inspection video.
  • September 6: Team and buyer evaluated inspection findings and determined next steps.
  • September 7-8: Post inspection renegotiations with seller. Another $2,500 price reduction was agreed in lieu of few inspection issues – the total is $14,000 below asking.
  • September 9: Price and inception period finalized & start of next phase of the prep.
  • September 10: Agent/Project manager + designer + electrician + handyman walkthrough – VIDEO
    short punch list
  • September 10: It was decided by the buyer and team to close earlier and closing had been moved to 9/20/24 (instead of 9/26/24)
  • September 16: Design and furnishing offer was presented to buyer
  • September 17: checking last items with title, 1031 QI, and attorney to make sure we are ready to close.
  • September 20: Purchase closing
  • September 21ts – Oct. 17th: misc. (and minimal) rehab work, furniture, and furnishing purchase + installation, final touches.
  • October 20th: Photography and final prep for listings
  • October 21st-23rd: listing on multiple websites

 

Punch List

 

 

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