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How to turn a 1031 exchange into passive income through real estate syndications.
1031 Exchange guide
A plain-English walkthrough of timelines, structures, common mistakes, and passive alternatives.
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Strategy call
30 minutes. Your timeline, your goals, and whether a syndication is the right fit for your exchange.
1
Sell property
Clock starts on closing
day
2
QI holds funds
45-day ID window opens
3
Identify replacement
Syndication qualifies
4
Close & go passive
180-day window
Common Questions
Q1: Can I 1031 into a syndication? Yes — in the right structure. The IRS requires replacement property to be "like-kind" real property, and not all syndication structures qualify automatically. A Tenancy in Common (TIC) structure qualifies because each investor holds a direct, undivided ownership interest in the real property itself — not shares in a company or units in a fund. Standard LLC syndications are more complex, and whether they qualify depends on how the interest is structured. The bottom line: the structure of the syndication matters as much as the asset. Working with a qualified real estate attorney before committing exchange proceeds is essential.
Q2: What is a TIC and how does it qualify? A Tenancy in Common (TIC) is a form of co-ownership where each investor holds a direct, undivided fractional interest in real property. Because investors hold actual title to real estate rather than interests in a company, TIC interests qualify as like-kind property under IRS Revenue Procedure 2002-22. In practice, this means your exchange proceeds can flow directly into a TIC investment and satisfy the replacement property requirement — the same way buying a property outright would. You hold title as a co-owner, but you can fully delegate management and operations to the sponsor. You get direct ownership and 1031 eligibility without the landlord responsibilities.
Q3: Do I need a QI, and how do I choose one? Yes — a Qualified Intermediary is not optional. The IRS requires that exchange proceeds never touch your hands between the sale and the purchase of your replacement property. A QI holds the funds during that period. If you receive the proceeds at any point, even briefly, your exchange fails and the full gain becomes taxable in the year of sale. When choosing a QI, look for one that keeps exchange funds in segregated accounts, carries fidelity bond and errors & omissions insurance, and is completely independent from you and your other advisors. Ask about their financial stability and track record. Your real estate attorney can help you evaluate options — and ideally, your QI should be in place before your relinquished property closes.
Q4: What is a reverse 1031 and when does it make sense? A reverse exchange flips the standard sequence: you acquire the replacement property first, before you sell your relinquished property. An Exchange Accommodation Titleholder (EAT) holds the replacement property while you complete your sale. Once the sale closes, the exchange completes and title transfers to you. The IRS approved this structure under Revenue Procedure 2000-37. It tends to make sense when you've found an exceptional replacement property you don't want to lose while waiting to sell, when you're in a competitive market where good deals move fast, or when you want more control over the timing of your sale. Reverse exchanges are more complex and more expensive than standard exchanges — the structure needs to be set up correctly from the start by qualified counsel, before you identify the replacement property.
Q5: What's the minimum investment with GTEG? Our minimums typically start at $500,000, though this can vary by deal. For 1031 exchange investors, the right fit depends on your exchange amount, your timeline, and the deal structure — TIC arrangements in particular may have different thresholds given the legal and administrative requirements involved. The best way to find out what's available for your specific situation is to schedule a strategy call. We'll walk you through what we have, what fits your timeline, and whether the structure works for your exchange.