Doing a 1031 exchange using a contract for deed purchase can be tricky. A common question we get is: "Can you do a 1031 exchange using a contract for deed purchase, even if the exchangor does not receive the deed immediately?"
In short, yes this would work. A vendee's interest gives the buyer equitable title. The exchangor can use all of the exchange funds to pay the down payment, and finance the rest with the seller over the term of the contract for deed.
For more information, check out this article that offers some tips for buing replacement property on a contract for deed.
- 1031 Hotline: If you have questions about 1031 exchanges and contract for deed, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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