1031 Exchange FAQs

No. Breakwater Exchange ensures all replacement properties meet IRS requirements by being held strictly for business or investment use. Personal residences are not eligible under 1031 rules.

Yes, and Breakwater Exchange helps you navigate the identification process with clarity. You may identify up to three properties under the 3-Property Rule or use the 200% or 95% rules for larger portfolios, depending on your goals.

Breakwater Exchange proactively manages your exchange timeline from day one. If the 180-day window is missed, the exchange fails, and taxes may be due. Our role is to help you avoid that entirely with tailored planning and vetted backup options.

Breakwater Exchange sources DSTs that feature stabilized, income-generating assets such as multifamily housing , medical offices , self-storage , and industrial properties , carefully selected for long-term performance.

With Breakwater Exchange, clients often close within 3–5 business days, thanks to our access to pre-acquired DSTs and efficient coordination with sponsors to meet IRS deadlines.

Yes. Breakwater Exchange typically works with minimums between $100,000 and $250,000 per DST, and we help you allocate across multiple trusts to support your diversification goals.

Yes. Breakwater Exchange structures cash out DSTs to be fully 1031-eligible , enabling you to defer capital gains while gaining liquidity through non-taxable refinancing, all with strategic oversight from our experienced team.

No. Breakwater Exchange utilizes these structures to prioritize equity preservation and long-term tax deferral. While they don’t produce monthly income, they are designed for strategic financial repositioning with proceeds realized at asset disposition.

Not at all. Breakwater Exchange only works with non-recourse financing for cash out DSTs, meaning your personal assets and credit are never at risk, only your invested equity is exposed, offering peace of mind with each transaction.

Yes. Breakwater Exchange structures each Direct Title Security to comply with IRC Section 1031 , so you can defer capital gains while maintaining full control and title ownership of your property.

Breakwater Exchange pairs each investment with a professional property manager who oversees leasing, maintenance, and tenant service. You enjoy hands-off ownership while retaining full decision-making authority.

Absolutely. Breakwater Exchange offers custom financing options designed to meet your 1031 exchange needs, without traditional bank involvement or personal liability. This ensures a smooth and compliant transaction.

Yes. At Breakwater Exchange, we help investors strategically pair accelerated depreciation funds with their 1031 exchanges to offset taxable income and enhance after-tax returns.

Every situation is unique, but Breakwater Exchange clients commonly offset 40–50% of their income in year one. We guide you through fund selection to maximize eligibility and impact.

Breakwater Exchange curates funds featuring high-quality commercial and residential assets with strong fundamentals and substantial depreciable components, optimizing your tax position from the start.

Yes. Qualified Opportunity Funds (QOFs) can accept capital gains from a wide range of assets, including stocks, collectibles, and business sales. Breakwater Exchange helps you navigate this flexibility by structuring tailored QOF strategies that align with your liquidity events and long-term objectives.

No. You’re only required to reinvest the capital gain portion to access the tax benefits of a QOF. Breakwater Exchange works closely with you to determine the exact gain amount and create a reinvestment plan that keeps the rest of your proceeds liquid and accessible.

Yes. These tools serve different purposes and can complement each other for investors with both real estate and non-real estate gains. Breakwater Exchange builds integrated strategies to help you diversify across both vehicles while maximizing your tax advantages.

Yes. Industrial properties qualify for 1031 exchanges when held for investment or business use. Breakwater Exchange structures your exchange to maximize tax deferral and align with your long-term goals.

Absolutely. Many industrial DSTs utilize long-term triple-net leases. Breakwater Exchange helps you identify these passive-friendly options, offering consistent income with minimal landlord responsibility.

We don’t just offer properties, we deliver due diligence. Breakwater Exchange thoroughly vets each opportunity with the help of our network of sponsors , analyzing tenant credit, lease terms, and market dynamics to help mitigate risk at every step.

Yes. Breakwater Exchange regularly helps investors exchange into MOBs using traditional DSTs , direct title solutions , or cash out DSTs , each structured for IRS compliance and income preservation.

Many leases range from 7 to 15 years due to customized build-outs. Breakwater Exchange sources properties with long-term agreements and stable tenant profiles to match your risk tolerance.

Absolutely. Through Breakwater Exchange’s sponsor network and platform , we can structure diversified portfolios of MOBs within a single exchange, tailored to geography, specialty, or lease structure.

Breakwater Exchange helps you access institutional-quality DSTs and direct-title options for multi-family investments that qualify under IRS Section 1031 .

Yes. With options like fractional DSTs or co-ownership in direct title structures , Breakwater Exchange helps you gain exposure without needing to purchase a property outright.

Breakwater Exchange evaluates the sponsor’s experience , market fundamentals, tenant mix, and reserve planning. Only properties that meet our strict due diligence criteria are recommended.

Breakwater Exchange helps you explore fully managed DST opportunities where operations are handled by experienced sponsors , allowing you passive ownership with institutional support.

Breakwater Exchange provides hyper-local due diligence reports that cover saturation levels, demand trends, and competitive analysis so you don’t get blindsided by poor placement.

Breakwater Exchange assesses based on age, condition, location, amenities, and management quality, then recommends only those that match your cash flow goals and risk profile.

Yes. Breakwater Exchange offers 1031-compliant DST structures that allow investors to access senior housing without active management, while preserving their tax deferral.

We connect you with sponsor-led offerings, conduct institutional-grade due diligence , and guide you through structured transactions with full transparency .

Yes. Demand is largely driven by demographic shifts rather than economic cycles, offering investors a buffer against volatility in other real estate classes.

Breakwater Exchange conducts comprehensive due diligence on tenant credit, lease structure, location fundamentals, market comps, and exit scenarios. Every asset is thoroughly vetted before it’s presented .

Yes. Many of Breakwater Exchange’s NNN opportunities are structured as DSTs , offering 1031-qualified entry points for deferring capital gains taxes while accessing high-quality, managed assets.

Breakwater Exchange helps structure the investment, identify sponsors , and support the closing process. For DST investments, you’ll enjoy a fully passive experience with third-party professional management.

A Zero is a high-leverage , triple-net-leased property with investment-grade tenants. Breakwater Exchange uses Zeros to replace required debt efficiently while minimizing risk and freeing up capital for better-aligned investments.

Zeros don’t pay current income, but Breakwater Exchange can pair them with debt-free properties that do. This hybrid strategy helps maintain or increase income while de-leveraging your position.

Yes. Breakwater Exchange can structure a Zero with a tax-free refinance so you can access liquidity and delay reinvestment until you find the right property, giving you breathing room from IRS deadlines.

Breakwater Exchange structures each direct title security solution as a single-member LLC that owns a physical property with a title and CUSIP . This structure is eligible under IRC Section 1031, allowing you to defer capital gains taxes while maintaining 100% ownership.

Breakwater Exchange’s direct title offerings come with professional property management, handling all leasing and maintenance, while you retain full ownership rights. You choose when to sell, refinance, or hold.

Yes. Breakwater Exchange offers flexible financing options so you can meet your 1031 replacement debt requirements without the constraints of traditional bank loans. You stay in control while fulfilling IRS guidelines.

Breakwater Exchange offers end-to-end guidance to help you execute a compliant, timely, and seamless 1031 exchange into one or more DSTs . We align property options to your goals while handling the details, so you don’t have to.

Yes. Breakwater Exchange works with investors who want partial cash-out options by helping structure a “boot” strategy that defers a portion of capital gain taxes through a partial DST investment.

Breakwater Exchange also offers hybrid solutions that allow for combining DSTs with directly titled property acquisitions . This gives you more flexibility while still utilizing the 1031 exchange benefits we’re known for.

Yes. Breakwater Exchange uses IRS-compliant Zero strategies to help you complete your exchange on time , even if you’re still evaluating your next move.

Breakwater Exchange helps structure a refinance option after the Zero closes, allowing you to access your proceeds and place them into income-generating vehicles until you’re ready.

Absolutely. With Breakwater Exchange, your debt replacement is already handled, giving you the freedom to purchase your next property without new bank debt.

Yes. Breakwater Exchange structures tax-efficient Zero strategies that enable you to pull equity via refinance, perfect for addressing other liabilities or reinvestments.

While Zeros don’t offer current distributions, we’ll balance your portfolio with other assets that do. Thanks to our vast network of sponsors , Breakwater Exchange ensures your income goals stay on track.

Not with Breakwater Exchange. We help structure tax-free refinance options that are pre-planned and backed by secure, long-term lease assets, offering stability and liquidity.

Breakwater Exchange helps you strategically handle excess proceeds, or “boot,” so you don’t face unnecessary taxes. Our documentation and timing process ensures clarity and compliance.

Yes. We evaluate debt replacement on every transaction and offer solutions, like offsetting cash or leveraging Zero strategies , to help you avoid mortgage boot tax exposure.

With Breakwater Exchange, boot is best handled upfront. We’ll work with your escrow team to release funds before the exchange begins, reducing complications and improving outcomes .

Breakwater Exchange can help you defer capital gains from real estate, business sales, and other appreciated assets. We structure it to meet all IRS requirements .

Breakwater Exchange’s Opportunity Zone solutions are designed with a 10+ year hold strategy in mind. After this period, capital gains from the fund can be eliminated entirely.

Yes. Many of Breakwater Exchange’s QOF projects begin generating income within 24–36 months after stabilization. Our team and our esteemed sponsors vet every fund for potential yield and growth.