A build-to-suit (aka construction) exchange is one type of like-kind exchange allowed under section 1031 of the Internal Revenue Code. In this article, we’re going to describe how you can construct improvements to your property as part of a build-to-suit construction exchange.
How Does a Build-to-Suit Construction Exchange Work?
A build-to-suit construction exchange works just like a typical forward exchange – you sell your relinquished property and then reinvest your proceeds into a replacement property. However, in a construction exchange, you incorporate construction improvements into your replacement property as part of your 1031 exchange.
Keep in mind that you still need to abide by your typical 1031 exchange deadlines in a construction exchange. Specifically, you only have 180 days total from the start of your exchange to the end of your exchange. That puts some significant restrictions on how much construction you can do so it’s important to keep those dates in the back of your mind throughout the process.
What are the Benefits of a Construction Exchange?
The great thing about a construction exchange is that it allows you to tailor your relinquished property to better meet your needs, rather than trying to find a perfect turnkey property (which can be difficult).
Find an Intermediary for Your 1031 Exchange
Find a qualified intermediary for your next 1031 exchange of real estate today by contacting CPEC1031, LLC. Our team consists of 1031 exchange professionals with more than two decades of experience in the like-kind exchange industry. With our expertise, you can rest assured that your exchange is in good hands. We can help prepare your required documentation for the exchange, answer your questions, and guide you through the 180 day exchange period from start to finish. Contact us now at our Twin Cities office to learn more about the exchange process and how we can help!
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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