A Seamless 1031 Exchange into the Perfect Duplex
The Challenge:
My clients were ready to level up their investment portfolio when an off-market duplex became available that perfectly aligned with their long-term financial goals. The property not only fit their investment criteria, but it also had value-add potential—offering opportunities to increase rental income and property appreciation over time.
However, to secure the duplex, they needed to sell their condo through a 1031 exchange to defer capital gains taxes. Timing was crucial, as their tenants were moving out, and they had a friend interested in purchasing the condo—but the sale had to work within both their desired price point and her loan approval amount.
With strict 1031 exchange deadlines in place, we had to move fast while ensuring a smooth transition between the two properties.
What is a 1031 Exchange?
A 1031 exchange allows real estate investors to sell one investment property and reinvest the proceeds into another—deferring capital gains taxes in the process. The key to making it work? Timing. Once a property is sold, investors have 45 days to identify a new property and 180 days to close—making seamless coordination critical.
The Strategy:
✔ Connected with a 1031 exchange accommodator – Ensured all legal and tax requirements were met for a smooth and IRS-compliant transaction.
✔ Facilitated a direct sale to their friend – Negotiated a fair price that worked within both parties’ financial parameters, avoiding the need to list on the open market.
✔ Synchronized both transactions – The condo sale and duplex purchase closed almost concurrently, keeping the 1031 exchange intact.
✔ Secured a duplex with value-add potential – The property provided an immediate income stream while offering opportunities to increase cash flow through renovations and improved management.
✔ Kept everything moving on a tight timeline – With tenants moving out and deadlines approaching, we ensured a seamless transition from one investment to the next.
The Results:
✔ Successfully completed the 1031 exchange – Deferred capital gains taxes while upgrading to a higher-performing asset.
✔ Made the condo sale work for all parties – Their friend became a homeowner, and they sold on their terms without the stress of listing.
✔ Acquired a duplex with untapped potential – Positioned themselves to increase rental income and long-term appreciation through strategic improvements.
Why This Matters for Investors:
A 1031 exchange is one of the most powerful tools for building wealth in real estate, but execution is everything. With the right strategy, connections, and timing, investors can upgrade their portfolio, defer taxes, and maximize returns—all while taking advantage of value-add opportunities.
Thinking about leveraging a 1031 exchange? Let’s strategize your next move and find the right investment for you. Contact me today!
