[daannyy]

If I buy a piece of land and build a house on it and my total cost is 50K then sell it for 150K and use the 1031 exchange can I do the same thing over again as long as the after development value is at least 150K or more?

Would the 1031 Exchange Qualified Intermediary be able to handle this the same way they would for a rehab property as long as the ARV is at least at the same or higher value?

So that I can buy the land for the same price I bought the last piece of land for, build the house at the same price I built the last house for, and then sell it at the same price or more as the last house?

[John Merchant]

Sounds workable but just remember 1031 is for comm'l props only and sale of residence is another whole deal.

[John_Corey]

Originally Posted by John Merchant

Sounds workable but just remember 1031 is for comm'l props only and sale of residence is another whole deal.

John,

Unless something has changed, the 1031 code is for investment property. This does not restrict it to commercial as a residential property can be held investment. I think you meant to say that the property can not be a personal residence. It has to be an investment property and that generally means something held as a rental.

A more general comment that is a reply to the original question. You many not get to use the 1031 code for a rehab project. It has to be a property that was held as an investment. A rehab project is closer to buying with the intent to sell and not buying to hold. Most folks who focus on 1031 transactions hold for a tax year or more so they can show that the property was held and used as an income producing property.

A tax attorney will know the fine points.

[John Merchant]

John C is right as I did mean ANY property including 1-4 resid units so long as REI doesn't live there.