The Optimal Exchange Strategy
In many situations, an Exchanger’s circumstances dictate which type of 1031 exchange should be used. For example, if there is a desirable Buyer for an Old Property who says that the close of the sale must occur at a certain time, then a delayed exchange is indicated. Likewise, if an Exchanger finds a desirable New Property and needs to close its purchase soon in order to secure the deal, a reverse exchange is indicated. Other constraints involve the issue of financing. For example, if an Exchanger simply cannot acquire a New Property prior to the sale of the Old Property, with the resulting availability of the cash proceeds, then a delayed exchange is indicated. At times, the need to keep the Old Property in place until the New Property is fully available will dictate the choice of strategy. In these situations, the Exchangers options are limited and it is relatively easy to determine the optimal course of action.