> 1031 exchange
1031 Exchange — Tax-Deferred Like-Kind Real Estate
Defer capital gains, compound principal across cycles, and reposition portfolio without giving 20 to 30 percent of equity to taxes. We coordinate the broker side of every 1031 we run.
By David Pierce, MHG Commercial
> The market we work
What 1031 exchange actually looks like in Phoenix metro.
A 1031 exchange lets a real estate investor sell investment property and roll the proceeds into a like-kind replacement property without triggering federal capital gains tax in the year of sale. The deferred tax compounds. Done correctly across multiple holding periods, a 1031 chain meaningfully outperforms an equivalent cash-sale-and-redeploy strategy.
The mechanics: the relinquished property is sold, the proceeds go to a qualified intermediary (not the seller), and the seller has 45 days from closing to identify replacement property and 180 days to close on it. Identification can name up to three properties without restriction, more under the 200 percent or 95 percent rules. Like-kind under Section 1031 is broad for real estate, almost any investment real estate qualifies as like-kind to almost any other.
Common 1031 exchange real estate pairings we work: duplex into small apartment, retail strip into single-tenant NNN, raw land into income-producing improved property, single asset into Delaware Statutory Trust for passive replacement.
> Working notes
What 1031 exchange actually requires.
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Common 1031 exchange real estate pairings we work:
Common 1031 exchange real estate pairings we work: duplex into small apartment, retail strip into single-tenant NNN, raw land into income-producing improved property, single asset into Delaware Statutory Trust for passive replacement. Each has tradeoffs in cash flow, management intensity, and depreciation reset.
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1031 exchange rules tighten on a few points worth knowing
1031 exchange rules tighten on a few points worth knowing. The 45-day identification deadline is hard. The 180-day closing deadline is hard. Boot, the cash or non-like-kind consideration that comes back to you, is taxable to the extent received. Debt relief on the relinquished property that isn't replaced with debt on the replacement counts as boot. We model the post-exchange position before the trade goes live.
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For a deeper read on rules, timelines, and
For a deeper read on rules, timelines, and Arizona-specific scenarios, see the 1031 Exchange Arizona Guide.
> Who this is for
Three operator profiles we work with most.
Investors selling appreciated property
- Holding for years, sitting on substantial unrealized gain, want to sell without triggering the tax.
- Need broker who maps replacement property options before the relinquished property closes.
Portfolio investors repositioning
- Trading out of a tired asset class into a fresh one, retail to industrial, multifamily to single-tenant net lease.
- Want disposition and acquisition orchestrated as one sequence.
First-time exchangers
- First 1031, want clear answers on rules, timelines, identification, boot, and replacement property fit.
- Need a broker who explains the mechanics and runs the search inside the 45-day window.
> How we work
A repeatable process, not a sales pitch.
Replacement strategy first
Before listing the relinquished property, we identify replacement candidates. Going to market without a target is how exchangers blow the 45-day clock.
Coordinate with the QI
A qualified intermediary holds the proceeds. We coordinate timing so funds flow correctly, identification happens inside 45 days, and closing happens inside 180 days.
Land the replacement
Tour, underwrite, offer, close. Inside the window, on a target that improves your portfolio, with debt sized to match the equity rolling forward.
> FAQs
1031 Exchange questions, answered.
> Schedule consultation
Ready to look at 1031 exchange options?
Tell us the use case. We come back with a tour list filtered to your operation.