Build your most efficient Reverse 1031 financing strategy
Compare your funding options, see what it takes to buy before you sell, and measure the advantage of negotiating without a sale contingency.
1The property you want
2The property you're selling
Carrying less debt than this can affect your exchange. Review the amount with your CPA.
3Other properties you own
Add value and loan balance optional
4Which property will the exchange company hold?
5Where the money comes from
Most lenders won't finance a property while an exchange company holds title. We offer bridge financing and long term financing for reverse exchanges, whether the exchange company holds the property you're buying or the property you're selling. Depending on your situation, you may not need a bridge loan at all.
Subject to program guidelines, underwriting, and approval.
Add each source until the purchase is fully funded. Check the loan you'll keep long term. Everything else is temporary and gets paid down when your current property sells.
6Reverse 1031 exchange cost
The added cost of a reverse exchange compared to a standard 1031. Enter the quote from your exchange company.
7Rental income while you wait
Rent minus the mortgage, taxes, insurance, and upkeep you already pay. Use a negative number if the property costs you money each month. Leave new property at 0 if it will sit vacant.
8Your non-contingent advantage
A contingent offer tells the seller, "I'll buy, but only after I sell mine." Sellers see risk and delay, so they hold firm on price or choose another buyer. A non-contingent offer, with financing in place, lets you negotiate a lower price or a seller credit.
Example: 2%. Use what you expect in your market, counting price reductions and seller credits.
- Seller waits on your sale
- Weaker negotiating position
- Higher risk of losing the property
- Clean, faster close
- Save as a lower price, a seller credit, or both
- Secure the property you want
Add your loan rates in step 5 to see your true cost.
Cost to buy first over 4 months
Your long term plan
Monthly payments while you wait
| Source | Amount | Monthly payment |
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Get your Reverse 1031 plan summary
A clean one page summary of this scenario, sent to your inbox. Share it with your CPA, attorney, or exchange company.
MHMike has more than 25 years in mortgage and real estate finance, is formally trained as a financial advisor, and is an active real estate investor. He works with investors, qualified intermediaries, CPAs, and attorneys to solve the timing and capital challenges that conventional lending isn't built for.
- $1B+ in career loan volume
- Top 1% mortgage originator nationwide
- Featured in Fortune, CBS News, FOX 11, and HousingWire
Your purchase is fully funded.