From 1031 Exchange to Hybrid Rental: A Step-by-Step Journey

This blog post, outlines the key milestones of a recent real estate transaction where we sold a property using a 1031 exchange and purchased another with the intention of creating a hybrid rental. This journey highlights the process from evaluating properties to the final listing, including negotiations, inspections, and preparing the new property for rental.
Whether you’re a seasoned investor or just starting, this detailed timeline offers valuable insights into executing a strategic property sale and acquisition.

Timeline

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Key Milestones

August 19-25: Multiple properties evaluated, 5 walked by our local agent, and 3 full walkthrough videos generated.
August 26: 1031 house sold-closed.
August 27: Another qualified house walked by our agent, and a full walkthrough video generated.
August 28: Team and buyer evaluated findings, budget, and determined next steps.
August 29: Cash offer submitted, $19,000 below asking.
August 30: Counteroffer accepted, $11,500 below asking.
September 3: Officially under contract.
September 5: Inspection completed. Post inspection video.
September 6: Team and buyer evaluated inspection findings and determined next steps.
September 7-8: Post inspection renegotiations with seller. Another $2,500 price reduction was agreed in lieu of few inspection issues – the total is $14,000 below asking.
September 9: Price and inception period finalized & start of next phase of the prep.
September 10: Agent/Project manager + designer + electrician + handyman walkthrough – VIDEO
short punch list
September 10: It was decided by the buyer and team to close earlier and closing had been moved to 9/20/24 (instead of 9/26/24)
September 16: Design and furnishing offer was presented to buyer
September 17: checking last items with title, 1031 QI, and attorney to make sure we are ready to close.
September 20: Purchase closing
September 21ts – Oct. 17th: misc. (and minimal) rehab work, furniture, and furnishing purchase + installation, final touches.
October 20th: Photography and final prep for listings
October 21st-23rd: listing on multiple websites