Call Us (866) 261-0104

Sometimes our plans just don’t work out. And if this happens, we should accept the change, consider new options and take a new path. This scenario can happen with your 1031 investment plans too. While we are firm believers in 1031 exchange and tax deferral opportunities for wealth creation and preservation along with generating potential income, we’re also honest and will always have your best financial interest at heart. Let’s discuss when a 1031 exchange might not be an option and what you can do about it.


Do You Want to Have Cash on Hand?

If you’re at a point in your life where liquidity matters, then putting all the equity proceeds from a sold property into a 1031 exchange might not be your best course of action. Perhaps you want to travel, have medical bills or other needs that outweigh the tax deferral benefits but at what costs? If this is the case, then let’s discuss and review with your CPA/tax advisor about what your potential tax liability may be and understand what makes the most sense for your situation prior to making a potentially expensive mistake. We can also discuss the pros and cons of a partial exchange.


Did You Sell at Loss?

This is an unfortunate scenario, but it does happen. If this is the case, then you must decide if proceeding with a 1031 exchange will be of any benefit to you. While you can still participate in this type of tax deferral transaction, you won’t be able to recognize the loss until the replacement property is sold. We can help talk you through this tricky scenario and offer some possible alternatives. You may also want to look at your tax return to see if there are any suspended passive activity or capital losses that can be utilized to potentially offset capital gains taxes.


Are You Struggling to Find a Replacement Property?

It is true we have multiple replacement properties available and some that can be closed in as little as three days, but you may personally not find these suitable to your investment strategy. Alternatively, you may feel 45 days just isn’t enough time and you may feel rushed. Go with your gut, but also listen to the experts. Let us know what your questions and concerns are, so we can go over what properties might be your best option – or not!


Are You Eligible for a 1031 Exchange?

1031 exchanges are regulated by the government and as such, they have very specific checks and balances. It’s possible your situation doesn’t allow such a transaction. Remember – primary residences are not eligible for 1031 exchange nor are properties earmarked for flipping purposes.


If you identify with any of these reasons but you still want to consider alternative investments, let’s talk. We may have workarounds or solutions to help you potentially earn income using other tools, such as a qualified opportunity zone. We’re here to help you realize your options when it comes to investing. Contact us here or call Bryan at 949-379-2080 to set up a casual but informative meeting or phone call.


Diversified Investment Strategies represents a team of experienced and trusted professionals specializing in real estate investment and services – including buying, selling, leasing, retirement planning and wealth growth and management through strategic, informed investment choices and a meticulous real estate investment analysis. As knowledgeable replacement property professionals, they help clients build a customized strategy that identifies suitable investments pursuing successful completion of a 1031 Tax-Deferred Exchange. Visit them at or call 866-261-0104.


There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results.  Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to sell any securities. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney.

Diversified 1031 does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.

Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Diversified 1031 is independent of CIS.