We are currently working with a client to acquire a significant piece of commercial real estate in New England. The client is in the process of selling six separate pieces of property in order to aggregate sufficient funds to make the new Replacement Property purchase. The client has been extremely careful (with our guidance) to time his sales and the new purchase all within a 45 day time frame. This is key to the success of the Exchange due to the fact that he will acquire not just one piece of property, but rather over a dozen condominiums.
You will recall that you have two basic rules when it comes to identifying your Replacement property choices, the Three-Property Rule and the 200% Rule. This Exchange is an example of yet a third method of identifying Replacement property. It allows the client to acquire an unlimited number of properties and without regard to value as long as the properties are acquired within the 45 day identification period. This can be a little nerve-racking for the investor and it pays to have a back-up plan. In the event something goes wrong with the acquisition, the client will have to hurry to identify other possible choices for each of the Exchanges in process.