I paid for the new property in all cash just to keep it simple and also because it was my first time doing a 1031 exchange. I used all the net proceeds to purchase the new property.
Now I realized that I should have used leverage and bought a larger property.
My question now is as follows:
Would I be breaking any IRS 1031 exchange rules if I got a Bank Loan on this purchased property and got about 70% equity out and invested this 70% as a down payment towards a new property?
If I would not be breaking any IRS 1031 Exchange rules, do I need to get a 1031 exchange involved for this transaction?
Thank you