A 1031 exchange occurs when someone wants to swap one investment property for another, while deferring part or all of the capital gains taxes.
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A regular 1031 exchange allows an investor to sell their relinquished property, have from the close of escrow 45 days to identify a new property and a total of 180 calendar days to complete the transaction. During a 1031 exchange, Rubicon works with a qualified intermediary to help facilitate the exchange.
Another type of 1031 exchange that is offered is a reverse exchange. In a reverse exchange, the client purchases the replacement property first, and from the close of escrow have 180 days to sell their relinquished property. Often times for clients, a reverse exchange can be difficult to complete due to financing issues. In a reverse exchange, the qualified intermediary takes title to the replacement property. With the qualified intermediary on title, clients often have a hard time acquiring financing from a conventional lender. This is where Rubicon steps in and makes the exchange possible, and is a valuable resource. At Rubicon, all loans are asset based, providing our clients with the funds to quickly acquire the replacement property and complete the reverse exchange in a short period of time.
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By combining the values of both the relinquished property ($1,000,000) and replacement property which is being purchased for $1,000,000 there becomes $1,200,000 of lendable equity.
- Loan to Value: 60%
- Can lend up to $1.2MM
- Can cover closing costs
*example above also work with all commercial property types.