1031 Exchange Realtor Handshake

How to Find a 1031 Exchange Realtor

Not all realtors are created equal, particularly when it comes to specialty services like property investing and 1031 Exchanges. Before we talk about how to find a 1031 Exchange realtor, make sure you understand the basics of an exchange. The 1031 Exchange allows a person to sell one or more appreciated assets (generally rental or investment real estate, but could be non-real-estate) and defer the payment of capital gain taxes by acquiring one or more like-kind properties. You can find more info on the benefits and process here.

Bottom line: If you are ready to make some changes to your investment portfolio, you’ll want an expert on your side. Ideally, you should look for a realtor who has their own portfolio and has completed a 1031 Exchange themselves. Knowing that your realtor will carry out an exchange with the same vested interest as their own brings a heightened level of confidence throughout the process. Keep reading for a thorough guide on finding the best 1031 Exchange realtor and why you definitely need one.

Why Do You Need a 1031 Exchange Realtor?

Any novice or experienced real estate investor will tell you that successfully completing a 1031 Exchange is no walk in the park. You should consult with a 1031 Exchange real estate expert for many reasons:

  1. Your money is on the line. Of course the major benefit for a taxpayer who successfully completes a 1031 Exchange is 100% deferral of taxes and the ability to invest all of their equity into new property. Unfortunately, if a taxpayer is not able to purchase new property to successfully complete the 1031 Exchange, the taxes associated with the sale of their investment property will be due. 
  2. Timing is key. In order to carry out a 1031 Exchange effectively, your sale and purchase must fall within a strict timeline, one that does not provide any leeways or grace periods. An expert will be able to keep you on-track and complete each step of the process on time.
  3. Experience Matters. Successfully coordinating a purchase and sale within the time constraints allowed by the IRS for a 1031 exchange require careful planning and a specific method of execution. Done incorrectly, not only could you be facing a significant tax bill, but the funds coming from your initial sale could be tied up for up to six months!

As you can see, a 1031 Exchange should be taken seriously and handled by a qualified real estate agent. 

How to Find One

Checklist for 1031 Exchange RealtorYou’re probably thinking “I can find anything online!” and you wouldn’t be wrong. You also wouldn’t necessarily be right unless you know what to look for. If you type into Google “1031 Exchange Realtor Orange County,” for example, you’ll find a bunch of ads talking about exchanges, and maybe even a couple of companies that have written 1031 Exchange Blogs. 

When sifting through these sites, make sure to look for realtors that have thorough 1031 Exchange pages on their website. You should also confirm the realtor has:

  •  A 1031-specific marketing plan
  • The correct documentation and disclosure forms for 1031 transactions
  • Relationships with lenders, attorneys, escrows familiar with 1031 exchanges, and 1031 facilitation companies
  • References of past clients they have worked with to successfully complete 1031 exchanges
  • Ideally completed a 1031 exchange themselves

Asking friends, family, or other real estate investors about their experience with a trusted agent is also a good idea! Make sure their recommendation also ticks all of the points mentioned above. Or better yet, call me today! I will happily walk you through what to expect, and how to get started. 

Curious about doing a 1031 Exchange yourself? Let me know!

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