The 45-Day and 180-Day Deadlines
A 1031 exchange is governed by two non-extendable deadlines, both starting the day you close the sale. Within 45 days you must identify the replacement property in writing, and within 180 days you must complete the purchase. The two clocks run concurrently, not back-to-back — so if you use the full 45 days to identify, you have 135 days left to close. Miss either deadline and the exchange fails, making the entire gain taxable.
The Identification and Value Rules
Beyond timing, two rules shape what you can buy. You can identify up to three replacement properties regardless of value, or more than three as long as their combined value doesn't exceed 200% of the property you sold. And to defer the full gain, the replacement property's value and debt generally must equal or exceed the relinquished property's — buying cheaper, or with less debt, can create a partial taxable "boot". These rules make financing part of the plan, not an afterthought.
Why Financing Speed Decides the Exchange
The biggest risk to a 1031 exchange isn't finding a property — it's closing on time, and a slow lender is what kills deals. A conventional approval takes 30 to 45 days, which leaves almost no room inside a 180-day window once you account for the search, negotiation, and due diligence. A private bridge loan closes in about 5 to 14 days, so the financing can execute at any point in the exchange without a multi-week lead time baked in.
Reverse 1031 Exchanges: Buy First, Sell Later
A reverse 1031 exchange lets you acquire the replacement property before selling the one you're giving up, which is useful when the right property appears before your sale is ready. In a reverse exchange, an Exchange Accommodation Titleholder (EAT) takes title to the new property while you finish selling the old one, and the 180-day clock runs from the date the EAT takes title. Because you need funds to buy before your sale closes, a bridge loan typically funds the EAT's acquisition — then it's repaid from the sale proceeds.
After the Exchange: Refinancing to Permanent
A bridge loan used to hit a 1031 deadline is short-term by design, so the plan is usually to refinance into permanent financing after the exchange closes. Once the replacement property is owned and, if needed, stabilized, it can be refinanced into a long-term loan — a DSCR loan for a rental, or an agency or bank loan for larger commercial and multifamily. Lining up that permanent takeout early keeps the whole exchange on solid footing.
