A Bayonne investor needed to sell his childhood home fast to complete a $5 million exchange. When his buyer walked away with a month left on the clock, we found another way to get it sold in time.
Bayonne, NJ
Three-Family Home
1031 Exchange Deadline
The seller was an experienced investor who owned several properties, but this one was different. It was the three-family home in Bayonne where he was born and raised, the place his family had lived in and rented out for years.
He was selling it as part of a 1031 exchange, a tax rule that lets an investor put the money from one sale straight into buying another property without paying tax on the profit, as long as the whole thing happens inside a strict window. He had already lined up the property he wanted to buy for five million dollars, and this home, along with a second property, needed to sell in time to fund it.
There was no room in the schedule for delay. If the sale slipped past the deadline, he stood to owe roughly a million dollars in taxes on a deal he had structured to avoid exactly that.
We had a buyer under contract for close to nine hundred thousand dollars, and the deal was moving well until the inspection came back. The inspector found serious foundation damage, the kind of repair that touches the whole building and makes a normal bank loan almost impossible. On top of that, a neighbor's new reflective windows had been melting the siding on one side of the house. The buyer's financing fell through around day forty-five of a sixty-day window, leaving thirty days to find a new way to get it sold or put the seller's entire exchange, and roughly a million dollars, at risk.
With thirty days left and no buffer for another failed inspection, we moved fast to find a way through that would not cost the seller anything.
We brought in an investor we already knew, someone who could buy without a bank loan, so an inspection could not sink the deal the same way it just had.
Given what the first inspection had turned up, we needed a buyer willing to move forward on the property as it was, without reopening the same issues that killed the first sale.
The new buyer paid less than the first one had. We covered that gap along with the city inspections, so the seller did not take a price reduction and did not lose any money on the sale.
We stayed in constant contact with the seller and coordinated timing against his other two sales, so the sale finished inside the window his 1031 exchange required.
Sold within the thirty-day deadline after the original buyer withdrew.
Seller received the full agreed price with no reduction and no costs taken back.
The 1031 exchange completed on schedule, avoiding roughly a million dollars in taxes.
The seller's related four point two million dollar sale and five million dollar purchase both went through as planned.
"We had a deadline to hit, so we stayed vocal and kept the seller in the loop the whole way. We had a plan A, B, and C, and when those hit walls, we came up with plan D and E."
Office Location
50 Park Place, Suite 301
Newark, NJ 07102
Office Location
50 Park Place, Suite 301
Newark, NJ 07102