1031 Exchanges

A 1031 exchange lets you defer capital gains taxes by reinvesting into another property.

The benefit is straightforward. The execution is not.

Timelines are strict. Decisions happen quickly. And financing has to line up with everything else — or the exchange falls apart.

The Basics

A 1031 exchange gets its name from Section 1031 of the IRS tax code. When you sell an investment property and reinvest the proceeds into another qualifying property, the capital gains tax that would normally be due is deferred — not eliminated, but deferred indefinitely as long as you keep exchanging.

To qualify the properties must be held for investment or business purposes. Working with a licensed Qualified Intermediary is required — you cannot touch the proceeds yourself during the exchange.

Where Things Get Complicated

Most issues with 1031 exchanges come down to timing and coordination:

• 45 days to identify replacement properties

• 180 days to close

• Financing needs to be in place within that window

• Backup options matter in case something falls through

Traditional (Forward) Exchange

The most common structure. You sell your relinquished property first, then identify and acquire the replacement within the IRS deadlines. Having financing lined up before you close on the sale is critical — not after you've already identified a property.

Reverse Exchange

You acquire the replacement property first and sell the relinquished property second. This structure is more complex and more expensive, but it solves a real problem in competitive markets where you can't afford to wait.

Why bridge loans are essential in a reverse exchange: Because you're purchasing before your sale proceeds are available, you need short-term financing to fund the acquisition. A bridge loan covers that gap — giving you the capital to close quickly while your existing property goes to market. Once the sale closes the bridge loan is paid off and your long-term financing takes over.

If you're considering a reverse exchange, having a lender who understands how bridge loans fit into the process isn't optional — it's the difference between the deal working and falling apart.

How I Help

If you're selling and buying in Oregon, I can handle the real estate side directly. On the financing side, I help make sure:

• You're pre-approved before you identify properties

• The loan structure fits the replacement property

• Timelines stay aligned so you don't lose the exchange

I'm not a Qualified Intermediary and I don't provide tax advice — you'll need a CPA and a licensed QI on your team for that. What I provide is the financing side, including:

• Bridge loans for reverse exchanges

• DSCR loans for replacement properties that qualify on rental income

• Cash-out refinance strategies to maximize your equity position before an exchange

• Long-term loan structuring for the replacement property

What Matters Most

Speed and clarity. You don't want to be figuring out financing after you've identified a property. That's where deals fall apart.

Thinking about a 1031? The financing conversation needs to happen before you list — not after.