In the simple 1031 description we described how the purchase and sale of an investment property in a 1031 exchange does not really effect the buyer and seller of the properties you are exchanging out of and in to. For them, it's simply a normal buy/sell transaction. There are, however, some things you need to consider as the one doing the exchange.
First, be careful of who you select as a Qualified Intermediary (QI). In effect, they are holding your money during the time between when you sell your existing property and identify and purchase your replacement one. Should something bad happen to the QI in the meantime you could have a very real problem with not only your exchange but the funds you've entrusted to them! Even if a QI files for bankruptcy AFTER your transaction is completed you could find yourself in a situation where the courts order that money back into the bankruptcy proceedings! Use a reputable Qualified Intermediary (QI).
You should also take note of the timelines involved in a 1031 exchange. You have 45 days to locate a replacement property for the one you are selling as part of a 1031 exchange. You then have 180 days total (including the 45 days available to find the property) to close on your replacement property. Again, it's not 45 + 180 but rather 180 days including your 45 day identification period.
Another source of confusion is that 180 days sounds a lot like six months. It isn't. The 180 day time period is 180 calendar days (including weekends and holidays). If today is the 15th of the month and you look at the calendar and think you have until the 15th six months from now you are going to be off a few days. Don't cut it that close. Likewise, if 180 days from now is a Sunday then your deadline is that Sunday. The 180 days does not roll forward until the next business day. The same applies with holidays. If your deadline is Christmas Day good luck finding a title company open! The lesson is to plan ahead.
Related to the above are your tax deadlines. The 180 days can't roll past this year's tax deadline (next April 15th) or a tax filing. If you start a 1031 exchange in November and then file your taxes in February without having your 1031 exchange completed then you've just ruined your exchange. If you're bumping into April 15 and you still don't have your exchange done from the previous year, file an extension. If you don't file the extension then you have to have your exchange completed by the April 15th tax dealine. Your 180 day exchange period cannot roll past a tax deadline.
For the reasons above you should definitely identify more than one property during your 45 identification period. These "alternate" properties will come in handy if something happens to the first choice. If you were to only choose one and something happened whereby you can't (or don't want to) close on it and your 45 day identification period has passed then that's it. It's too late to choose another. The clock does not start over.
Lastly, you should note that exchanges are for investment properties (on your end). It doesn't matter what the buyer you sell to or the seller you buy from used or intends to use their respective properties for but YOU need to use them both as investment properties. You cannot sell your personal residence as part of a 1031 exchange nor can you exchange an investment property you own for one you will live in. For simple information on types of properties you can exchange see 1031 property identification rules.