Reverse & Parking Exchanges
Rhythmic Exchange ServicesA Reverse or Parking Exchange is where an Exchanger purchases their Replacement Property prior to selling their Relinquished Property. The typical order of events occurs in reverse, hence the name.
How It Works
The Exchanger cannot own both properties simultaneously. An Exchange Accommodation Titleholder (EAT) acquires the Replacement Property and holds title until the Exchanger sells the Relinquished Property. The EAT then transfers title back to the Exchanger to complete the exchange.
Why Use a Reverse Exchange?
Competitive Market
Finding suitable replacement property within 45 days can be difficult. A reverse exchange lets you secure the property first.
Financial Continuity
Selling an income-generating property first means income stops for up to 180 days. Buying first preserves cash flow.
Business Operations
If you operate your business from the property, you can't shut down during the transition. Buy first, then relocate seamlessly.
Timing Mismatches
When the replacement property seller insists on a closing date that doesn't align with your relinquished property sale.
Which Property Gets "Parked"?
Traditionally, the Replacement Property is parked with the EAT. However, the Relinquished Property may be parked when:
- The relinquished property value is much less, making the EAT loan easier
- The replacement property requires special financing
- The replacement property lender won't lend to an LLC
- The replacement property has environmental concerns
Considering a reverse exchange?
Contact Joshua Oliver at (919) 371-8497
Contact Us1031 exchange services are provided by a qualified intermediary that is a wholly owned subsidiary of Accruit LLC, an Inspira Financial solution. The provider of these materials is not an agent or employee of, nor otherwise affiliated with, the qualified intermediary.