Build-to-suit construction exchanges are a bit more complicated than standard forward 1031 exchanges, but offer a great benefit to taxpayers who want to make improvements to their replacement property before closing. Contact our Fargo build-to-suit exchange professionals today to discuss your exchange today –877.373.1031.
What is a Build-to-Suit Exchange?
A build-to-suit exchange is one of several types of 1031 exchanges available to taxpayers. In a build-to-suit exchange (also known as a construction exchange), the exchangor is able to make construction improvements to their replacement property before acquiring it. This can be extremely beneficial if you find a replacement property that is in a great location, but perhaps needs a little bit of work to get it up to your desired specifications.
Keep in mind though any improvements need to be constructed on the property within the 180 day time period. Any construction that is not finished after the 180th day cannot be included in the 1031 exchange.
How to Start a Build-to-Suit Exchange?
Starting a build-to-suit exchange works in the same way a typical forward exchange works. The exchangor sells their relinquished property. After the closing of that sale, the exchangor identifies new replacement property within the first 45 days. Once identified, this property can then have improvements constructed on it within the 180 day time period. The like-kind rules still apply in that the relinquished and replacement properties need to be like-kind to one another.
Fargo Like-Kind Exchange Company
It’s important to talk with a qualified intermediary early in the process when you’re doing a like-kind exchange. A qualified intermediary can create a 1031 strategy with you, help you find a suitable replacement property, explain all of the necessary requirements for your exchange, and prepare all of your documents for closing. If you are considering a like-kind exchange in the Fargo area, pick up the phone and call our Fargo 1031 exchange company –877.373.1031.