Reverse 1031 Exchange

How a Reverse Exchange Works

In a reverse exchange, a third-party EAT takes title to either the replacement or relinquished property while you complete the transaction. You have 45 days to identify the property to be sold and 180 days to close the entire exchange.

• EAT holds title to the parked property during the exchange period
• You have 45 days to identify the relinquished property
• You have 180 days total to complete the exchange
• Requires careful coordination between all parties

When Is a Reverse Exchange the Right Choice?

Reverse exchanges are ideal when you find a replacement property in a competitive market and cannot wait to sell your current property first. They are also useful when you need to close on a replacement property quickly to secure favorable financing terms.

• You found the ideal replacement property before selling
• The replacement property is in a competitive market
• You want to lock in favorable purchase terms immediately
• Your current property will sell quickly once listed

Costs and Complexity

Reverse exchanges are more complex and costly than forward exchanges due to the EAT structure and additional legal requirements. However, the tax savings typically far outweigh the additional costs. Our team handles all the complexity so you can focus on your investment strategy.