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Some 1031 Exchangers seek out model homes as replacement properties for their 1031 exchanges. As you probably know, rental properties are generally qualified properties for 1031 Exchange and a model home comes with a tenant in place - the builder. When the builder's lease expires, the 1031 Exchanger can either rent the property to another tenant or, if the exchanger has changed his mind and wants out of the rental business, the exchanger might decide to move into the property (convert the property from rental to personal use). Through a network of builders in the Tampa Bay, Florida area, 1031Replace.Com may be able to assist to find you a model home to purchase as a 1031 Exchange replacement property. If you wish to consider model homes in another part of the country, usually a Realtor in that area can assist you.
However, model homes are not for everyone. If the model home is far from you, after the builder is through with it, you are simply an absentee owner of a single family rental property which, as we are sure you are aware, can be a headache. Also, model homes are usually not cheap and, unless prices are escalating rapidly and new home construction is scarce in the area, resale may not be as profitable as you might like. |
