1031 Exchanges: A Strategy Every Investor Should Know

[Colin Tandy]

One of the most overlooked tools in real estate investing is the 1031 exchange, yet it can be a game-changer for scaling a portfolio while deferring capital gains taxes.

The basics are simple: When you sell an investment property, you can defer capital gains taxes by reinvesting the proceeds into a like-kind property. But there are some key rules to keep in mind:

✅ You only have 45 days to identify a replacement property and 180 days to close—miss these deadlines, and you owe taxes.
✅ All sale proceeds must go through a qualified intermediary—if the money touches your account, it’s taxable.
✅ The new property must be of equal or greater value than the one you sold.
✅ Financing can get tricky—if you're using a loan, make sure it aligns with 1031 exchange requirements.

Many investors use this strategy to trade up—moving from smaller properties to larger, higher cash-flowing assets without taking a tax hit in between. Others use it to diversify into new markets while keeping their capital working for them.

I’d love to hear from others, have you done a 1031 exchange before? What challenges (or wins) did you experience?