My clients have sold an investment property and wish to do a 1031 exchange into a new investment property. Their original plan was to buy in Reno, but that did not work out. They now have less than 2 weeks in which to identify a property and get an offer accepted in order to avoid paying significant capital gains taxes.
Area of Choice:
In or around Petaluma where they live.
Like most of Sonoma County, Petaluma is experiencing a buying frenzy with most properties under $550,000 receiving multiple offers. I take my clients out on several occasions and look at a half dozen properties. There is very little from which to choose but with time bearing down, we write an offer. Fortunately, that offer is not accepted. I can sense everyone’s relief for there was not 100% consensus that this was the right property for them.
We decide to look outside of Petaluma. I find a new development in Cotati, 5 miles away, which is just finishing phase one construction. We drive out only to find the sales office closed. My clients now have five days left in which to meet their deadline.
We get out and walk among the many construction workers, finally finding the managing contractor, John, who couldn’t be nicer. John stops what he’s doing and walks us through the unit that is almost finished. My clients are impressed but they don’t like the location. They walk around the site and find a corner unit that has great light from side windows that open on a pastoral setting.
With 24 hrs to their 1031 exchange deadline, their offer is accepted. A month later we celebrate their ownership of a beautiful new town home in a very up and coming area of Sonoma County.