1031 Exchange Analysis
Analyze 1031 Replacement Properties Instantly
Evaluate cap rates, cash flow, depreciation recapture, and tax impact. Calculate your reinvestment requirement. Understand exactly how much capital you need to deploy—without triggering boot.
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1031 Exchange Explained
A quick primer on how a tax-deferred 1031 exchange works before you analyze replacement properties below.
Property Type
Property & Revenue
Financing
Hold Period & Exit
When you sell, will the market be hotter, the same, or cooler than today? This determines your exit cap rate and sale price.
Conservative — you assume the market cools and buyers pay less per dollar of income. This is the safer assumption most lenders and institutional investors use.
Overall Deal Grade
A
IRR
13.89%
★★★★★Strong return
DSCR
1.37x
★★★★★Strong coverage
Cash-on-Cash
10.72%
★★★★★Excellent cash yield
Equity Multiple
2.81x
★★★★★Doubled your equity
Cash Flow Analysis
NOI vs Debt Service vs Cash Flow by year
Equity Buildup
How your equity grows: loan paydown + cash flow + appreciation
Rent Schedule
Annual NOI growth over hold period
Loan Paydown
Remaining loan balance over hold period
Income & NOI
- Year 1 EGI
- $80,000
- Year 1 OPEX
- $0
- Year 1 NOI
- $80,000
- Entrance Cap Rate
- 8.00%
- Yield on Cost
- 8.00%
- 10-Yr Total NOI
- $875,978
Financing
- Purchase Price
- $1,000,000
- Down Payment
- $250,000
- Total Equity Invested
- $272,500
- Loan Amount
- $750,000
- Monthly Payment
- $4,864
- Annual Debt Service
- $58,374
- DSCR
- 1.37x
Exit & Returns
- Exit Cap Rate
- 8.50%
- Exit Year NOI
- $97,520
- Exit Value
- $1,147,289
- Selling Costs (3%)
- $34,419
- Loan Payoff
- $639,757
- Net Sale Proceeds
- $473,113
- Total Profit
- $765,352
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Benchmark Comparison
| Metric | Your Deal | Benchmark | Status | Insight |
|---|---|---|---|---|
| IRR | 13.89% | > 12% strong | PASS | Strong annualized return |
| DSCR | 1.37x | > 1.25x lender min | PASS | Meets lender requirements |
| Cash-on-Cash | 10.72% | > 6% target | PASS | Good annual cash yield |
| Equity Multiple | 2.81x | > 2.0x strong | PASS | Doubled equity or better |
| Yield on Cost vs Exit Cap | 8.00% | 8.50% exit cap | WATCH | Buying above exit cap — assumes compression |
Sensitivity Matrix
Exit value at different cap rate and NOI growth combinations
| Exit Cap / Growth | 0% Growth | 1% Growth | 2% Growth | 3% Growth | 4% Growth |
|---|---|---|---|---|---|
| 7.00% | $1,142,857 | $1,262,425 | $1,393,136 | $1,535,904 | $1,691,708 |
| 7.50% | $1,066,667 | $1,178,264 | $1,300,261 | $1,433,511 | $1,578,927 |
| 8.00% | $1,000,000 | $1,104,622 | $1,218,994 | $1,343,916 | $1,480,244 |
| 8.50% | $941,176 | $1,039,644 | $1,147,289 | $1,264,862 | $1,393,171 |
| 9.00% | $888,889 | $981,886 | $1,083,551 | $1,194,592 | $1,315,773 |
Green = exit value exceeds purchase price. Red = exit value below purchase price.
Year-by-Year Cash Flows
Metric Glossary
IRR
Internal Rate of Return — the annualized return on every dollar you invest, accounting for timing of cash flows.
Equity Multiple
Total money returned divided by total money invested. 2.0x = you doubled your money.
Cash-on-Cash
Annual cash flow as a percentage of your invested equity. Measures what the property pays you now.
DSCR
Debt Service Coverage Ratio — how many times NOI covers the mortgage. Lenders require 1.25x minimum.
Cap Rate
NOI divided by property value. The return assuming all-cash purchase. Lower cap = higher price.
NOI
Net Operating Income — rent minus operating expenses, before mortgage payments.
Yield on Cost
Year 1 NOI divided by purchase price. The cap rate you created for yourself as a buyer.
Exit Cap
The assumed cap rate when you sell. Higher exit cap = lower sale price (conservative).
For informational and educational purposes only. Not financial or investment advice. Consult a licensed professional before making investment decisions.
1031-Specific Metrics Explained
Reinvestment Requirement
The IRS requires you to reinvest 100% of your net sale proceeds into like-kind replacement property. If your sale nets $2M, you must deploy at least $2M to avoid "boot" taxation. Our analyzer calculates exactly how much capital this property requires.
Formula: (Sale Price) − (Selling Costs) = Reinvestment Requirement
Depreciation Recapture
Depreciation you claimed on the relinquished property is part of the gain. In a fully qualifying exchange that gain is generally deferred with the rest, but cash or other non-like-kind property you receive (boot) can make some of it taxable now, and any depreciation recapture is taxed at higher rates than ordinary capital gains. Have your CPA confirm how it applies to your exchange.
Rough exposure if recapture is triggered: (Depreciation Claimed, up to the gain recognized) × the applicable federal rate, up to 25% for unrecaptured Section 1250 gain
Florida Tax Advantage
Florida has no state income tax and no capital gains tax. When you exchange into Florida property, you eliminate the state tax layer entirely. Combined with federal deferral, you reinvest 100% of proceeds instead of 60–75% after state taxes.
Benefit: Save 3–13% state tax vs. CA, NY, NJ, IL, and other high-tax states
Boot Calculation
"Boot" is cash or other property you receive without reinvesting it. Boot triggers capital gains tax. Our analyzer shows if your replacement property leaves uninvested capital and how much tax you'd owe. Avoid boot by reinvesting the full amount.
Formula: (Net Sale Proceeds) − (Replacement Property Price) = Boot (if positive)
Typical 1031 Replacement Properties
NNN (Net Lease) Properties
Single-tenant retail, fast casual, medical. Tenants (Walgreens, Chick-fil-A, CVS) pay all operating costs. Cap rates: 5.5–7.5%. Low maintenance, passive income ideal for 1031 exchanges.
Multifamily (Apartments)
Residential apartments, student housing. You manage operations. Cap rates: 5.0–7.5%. Strong for 1031 since they are like-kind replacement properties and offer diversified income.
Industrial (Warehouses)
Logistics, fulfillment centers, light manufacturing. Strong post-pandemic demand. Cap rates: 4.75–6.75%. Good for long-term 1031 exchanges seeking stable tenancy.
Land & Development
Vacant land held for investment or future development. Lower cap rates (2–4%) but appreciation potential. Lower income but strategic for longer-term wealth building in 1031 structures.
⏱️ Don't Miss Your Deadlines
You have 45 days from your sale to identify replacement properties, and 180 days to close. Use our timeline calculator to never miss a critical date.
View Timeline Calculator →🏢 Browse Properties
See pre-vetted 1031 replacement properties across 19+ Florida markets. Filter by cap rate, price, and property type to find your next investment.
View 1031 Properties →What the Analyzer Calculates, and What It Does Not
The calculator above is the general deal analyzer: it underwrites the replacement property (cap rate, debt service coverage, cash-on-cash, IRR, equity multiple, exit value). It does not take your relinquished-property basis or calculate boot or tax. The reinvestment and boot figures are simple arithmetic you can do with the formulas shown on this page:
Net Sale Proceeds = Sale Price − Selling CostsBoot (cash left over, simplified) = max(0, Net Sale Proceeds − Replacement Price)Recognized Gain = lesser of (Realized Gain, Boot) [IRC 1031(b)]Identify within 45 days; receive within the earlier of 180 days or the return due date [IRC 1031(a)(3)]The boot line is this page's simplification. It treats cash as the only boot and ignores loan payoff or assumption and other non-like-kind property, which can also matter. Your qualified intermediary and CPA set the actual figure.
Worked Example: Reinvestment Check and a Replacement Property
Hypothetical numbers for illustration, not a quote or a forecast. The assumptions:
- →Relinquished property sells for $2,500,000 with $150,000 of selling costs, so net sale proceeds are $2,350,000
- →Assumed adjusted basis of $1,000,000, so realized gain is $1,350,000 (illustration only)
- →Replacement A: $2,400,000 single-tenant NNN building, $156,000 year-1 rent (6.50% cap), 9,000 SF
- →Analyzer defaults for the rest: 25% down, 6.75% rate, 30-year amortization, $15,000 closing costs, 1.0% loan fee, 10-year hold, +0.50% exit cap spread, 2.0% rent growth
- →Replacement B (comparison): $2,200,000 purchase
Replacement A results were produced by rendering this page's analyzer with those inputs. The exchange arithmetic is a simplified illustration, not tax advice. The analyzer's own DSCR rating for Replacement A is 'below lender minimum', which is the kind of finding the tool is for.
Inputs and Limits
Boot, recapture and the exchange
Under IRC 1031(a), gain or loss is not recognized when real property held for business or investment is exchanged solely for like-kind real property, and under 1031(b) gain is recognized only up to the money and other property received. The statute text we read does not carve depreciation recapture out of that deferral. Two statements elsewhere on this page (that recapture is not deferred, and a flat 25% recapture formula) were written before this review, are not supported by the sources cited here, and should be confirmed with your CPA.
Deadlines
The 45-day identification and 180-day receipt periods run from the transfer of the relinquished property. Treas. Reg. 1.1031(k)-1 requires identification in a signed writing that describes the property unambiguously, and the identification limits are the three-property rule, the 200% rule and a 95% exception. Use the 1031 timeline calculator for dates.
Qualified intermediary and receipt of funds
If you take actual or constructive receipt of the sale money, the exchange can fail. The regulation provides safe harbors, including the use of a qualified intermediary under a written exchange agreement that limits your rights to the funds. Engage one before closing the sale.
No Florida or state tax calculation
The analyzer does not compute state tax. The statement that Florida has no state income tax is general context, so confirm any state tax position for your entity with a CPA.
Inputs and ranges
Property type (NNN, multifamily or single-family rental), price, rent or per-unit rent, vacancy, expenses, financing terms, hold period of at least one year and an exit-cap outlook. Rent must be above zero or no result appears. Selling costs at exit are fixed at 3%. Cap rate ranges quoted on this page are market commentary, not guarantees.
Sources and As-Of Dates
- 26 U.S.C. 1031, Exchange of real property held for productive use or investment: (a)(1) nonrecognition for like-kind real property; (a)(3) 45-day identification and 180-day receipt limits; (b) gain recognized up to boot; (h) U.S. and foreign real property are not like-kind to each other.
- Treas. Reg. 1.1031(k)-1, Treatment of deferred exchanges: written identification within 45 days, 3-property / 200% / 95% rules, qualified intermediary and constructive-receipt safe harbors.
Sources last checked November 1, 2026. This is not tax or legal advice. Exchange structure depends on your facts, so work with a qualified intermediary and a CPA or attorney.
1031 Analyzer Questions
What makes a 1031 deal analyzer different from a standard CRE calculator?
A 1031 deal analyzer includes tax-deferred exchange-specific metrics: your reinvestment requirement (how much capital you must deploy), depreciation recapture calculations, state tax impact (important in zero-tax states like Florida), and boot calculations. Standard calculators ignore these 1031-specific concerns.
How do I know if a replacement property meets my 1031 reinvestment requirement?
The IRS requires you to reinvest 100% of your net sale proceeds (sale price minus selling costs). If you don't reinvest the full amount, the difference is 'boot' and triggers capital gains tax on that portion. Our 1031 analyzer shows your reinvestment requirement and warns if a property leaves capital uninvested.
What is depreciation recapture and why does it matter?
When you owned your relinquished property, you deducted depreciation, reducing your taxable income. When you sell, depreciation recapture can be taxed at up to 25% federally (unrecaptured Section 1250 gain). In a fully qualifying 1031 exchange that gain is generally deferred along with the rest, but boot (cash or non-like-kind property received) can trigger it. Confirm how it applies to you with your CPA.
Why does Florida matter for 1031 replacement properties?
Florida has no state income tax and no capital gains tax. When you 1031 exchange into Florida property, you eliminate state taxes entirely. Combined with federal deferral under IRC Section 1031, you keep more capital working. Our analyzer shows the tax advantage of Florida reinvestment.
Can I use this analyzer for properties outside Florida?
Yes. The analyzer works for any 1031 replacement property nationally. However, you'll see the tax advantage diminish in high-tax states. We focus on Florida because of the unique zero state-tax benefit, but you can model any state's combined federal + state tax impact.
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