Reverse 1031 Exchange Loan
An indispensible tool for committed real estate investors.
The Stonecrest Difference
Non Recourse Loan Structure
Cross Collateralization
Flexible Financing
Reverse 1031 Exchange Loan Benefits
Our 1031 Reverse Exchange Loan program is structured to help investors make tax-deferred investments with maximum efficiency and flexibility.
Non-Recourse Loan Structure for Flexibility
Unlike most conventional/institutional lenders, we make non-recourse loans. Non recourse language in a loan is often a requirement of Exchange Accommodators (EA’s). This gives our borrowers more flexibility in setting up 1031 Exchange Loans to fit their needs.
Cross Collateralize for Additional Leverage
You can use multiple properties (and multiple property types) to collateralize our 1031 Exchange Loan. This maximizes our borrowers’ leverage in optimizing the value of their real estate portfolios.
Finance Options to Get More Deals Done
You can finance up to 100% of the new purchase price including closing costs, up to a maximum Combined Loan-to-Value ratio of 70% (market value will be determined for the purposes of each loan transaction).
Terms
Loan Amount
Up to
$10 million
Term:
6 months,
12 months
Mini Case Study:
Reverse 1031 Exchange Loan
The Goal: Our borrower is selling 9 investment properties and he wants to defer capital gains tax on those sales via the purchase of a replacement property using a 1031 exchange. He identified a multi-unit property in the area to purchase as the new investment in the exchange.
The Challenge: The sale of the 9 individual properties was likely to take significant time, and the borrower needed to move quickly on the new (replacement) purchase. Since a standard 1031 exchange requires the sale of the relinquished property(s) prior to the purchase of replacement property, a conventional 1031 exchange could not be used. The borrower needed to implement a reverse 1031 to solve this problem, and he also needed cash for the down payment on the new purchase since he would not have the proceeds from the sale of his original investment.
The Solution: Stonecrest first set up a Reverse 1031 Exchange, in which a qualified Exchange Accommodator temporarily held title to the replacement property, as allowed by IRS rules. This preserved the tax-deferred status on the capital gains from the sale of the 9 properties to be sold. Secondly, Stonecrest provided a loan secured against the borrower’s additional real estate ( a large ranch) in order complete the replacement purchase prior to the sale of the original nine properties.
