This week’s question comes from Vince on the Real Estate Rookie Facebook Group. Vince is asking: After a 1031 exchange, can I refi/cash-out most of the funds and use it to purchase other property? Will I still be liable for taxes?

While neither Tony or Ashley are tax specialists, they have had some experience in the past with 1031 exchanges. Firstly, make sure you understand the rules of a 1031 exchange and use an intermediary to perform one, after that you may be in the clear to refinance!

Here are some suggestions:

Use the entirety of your 1031 profits to purchase (or subsidize) a new property to limit taxes

Harness the power of appreciation to “swap til you drop”

Use the same entity to 1031 exchange your property and hold it for at least two years

Use a trusted intermediary to complete the exchange

And more in the episode…

If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).

Links from the Show

Real Estate Rookie Rookie Facebook Group

Real Estate Rookie Youtube Channel

Check the full show notes here: https://www.biggerpockets.com/rookie120

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120: Rookie Reply: Can I Cash-Out Refi After a 1031 Exchange?