Seller Financing and 1031 Exchange

A lot of investors are surprised to learn that they can use seller financing and still do a 1031 exchange. By endorsing the seller carry-back note to the QI, you can “park” it along with the cash proceeds of your sale. Result: you gain time to get financing on your replacement property and use part of the financing proceeds to redeem the endorsed note. The cash that replaces the “parked” note must be used to acquire replacement property.