A 1031 exchange lets a commercial real estate investor sell an investment property and buy another one while deferring capital gains taxes. It’s named after Section 1031 of the Internal Revenue Code. For Florida investors, it’s one of the most powerful tools for growing a portfolio. Here’s how it works and where a broker fits in.
The Basic Rules
- Like-kind property. Both properties must be real estate held for investment or business use. Almost any investment real estate qualifies: a warehouse can be exchanged for a retail center, an apartment building or land. Your personal home does not qualify.
- 45-day identification. You have 45 days from the sale of your old property to identify replacement properties in writing.
- 180-day closing. You must close on the replacement property within 180 days of the sale.
- Qualified intermediary. The sale proceeds must go to a qualified intermediary (QI), not to you. If you touch the money, the exchange can fail.
- Equal or greater value. To defer all the tax, buy property of equal or greater value and reinvest all the net proceeds. Cash you take out, or a drop in debt, is called “boot” and can be taxable.
Identification Rules
Most investors use the three-property rule: identify up to three potential replacement properties of any value. Other rules allow more properties under value limits. Your QI and tax advisor will explain which fits.
Florida-Specific Points
- Florida has no state personal income tax, so for most individual investors the 1031 is about deferring federal capital gains and depreciation recapture.
- Many Florida investors trade management-heavy properties, like older apartments, for lower-maintenance assets such as NNN retail, small-bay industrial or medical office.
- The 45-day clock is short. In a tight market like Broward, start looking for replacement property before you close the sale.
Where a Broker Helps
The hardest part of a 1031 exchange is usually finding the right replacement property in 45 days. Adam Docktor helps exchange buyers:
- Line up replacement options before the relinquished property closes
- Find on- and off-market industrial, retail, flex, multifamily and land deals in Broward and South Florida
- Run the numbers on each option, including cap rate, cash flow and financing
- Negotiate contracts with timelines that fit the exchange deadlines
He also represents sellers, so he can handle both sides of your exchange.
Popular Replacement Property Types
- Small-bay warehouse and flex buildings, with strong tenant demand across Broward (warehouse for sale)
- Single-tenant NNN retail (what is a NNN lease)
- Multifamily in Fort Lauderdale, Wilton Manors and Oakland Park
- Development land (land for sale)
Talk to Adam Directly
No assistants. Call or text and you reach Adam.
Call or Text 954-610-0440 Email [email protected]This article is general information, not tax or legal advice. Talk to your CPA, tax attorney and qualified intermediary before you start a 1031 exchange.
