Has anyone done a 1031 exchange on mineral rights to an invest house? If so, was the process expensive or complicated?
Have a look at Petroleum Strategies out of Midland TX. They’ve been doing this for nearly 30 years and carry a good reputation. I’d suspect they’ve seen every scenario in the book.
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Lynne- It is neither expensive nor complicated. There are rules and time frames that must be followed. I’ve used MidlandIRA several times for different transactions.
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You can do it - there are several rules though.
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You have to use an agent that is able to do a 1031. So basically, they handle the entire money part of the transaction and everything. If you touch the money or even have it put into your bank account, you no longer can do the 1031.
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Has to be investment property. So you can’t do a 1031 exchange to buy yourself a new home or second home. It would need to be a rental or something.
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You have had to have the property you’re wanting to do the 1031 with for a certain period of time.
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You have a time limit. It’s several months or something along those lines. So you can sell your property, then buy another in 10 months. You’ll have to look up time limits because it may vary by state.
I am sure there are more, but those are what I remember off the top of my head.
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Cole, Thank you. That’s important information. I’ll need to research whether I should use a company to do this in North Dakota or my state. I’m inclined to think that North Dakota would be better as they are more acquainted with oil.
I believe what I’m intending to do would qualify as investment.
Good info.
I’ve personally used Petroleum Strategies several times on this very thing and every time it’s gone perfectly. They will make sure you’re compliant and inform you of all the ins and outs. Do yourself a favor and give them a call. Good luck.