The most common type of exchange is labeled a “forward exchange” and simply means that the investor sells the relinquished property before acquiring a like-kind replacement property. If the timing does not work for this delayed exchange, there are many other types of exchanges that can be used depending on the circumstances.
A. Forward (or delayed) Exchange: where one property is sold and, within 180 days, another like-kind property is acquired.
B. Reverse Exchange: should be considered when the investor finds the property they want to buy and must purchase it before they are able to sell their current property.
C. Construction Exchange: can be utilized when an investor desires to build the eventual replacement property to certain specifications and/or on a separately acquired lot.