1031 Exchange Investments
with Break of Day Capital
Looking for a Passive 1031 Exchange Opportunity?
If you’re selling an investment property and considering a 1031 exchange, Break of Day Capital may be able to help.
We work with investors who want to defer capital gains taxes while maintaining exposure to real estate through professionally managed multifamily investments.
Whether you’re selling a single-family rental, apartment building, retail center, office property, or other investment real estate, our team can help determine whether one of our current opportunities is a fit for your exchange needs.
Why Investors Use a 1031 Exchange
A 1031 exchange can do more than simply defer taxes. For many investors, it provides an opportunity to reposition capital, simplify ownership, and align their investments with their long-term goals.
Preserve More Capital
By deferring capital gains taxes and depreciation recapture, investors may be able to keep more capital invested and working for them.
Transition from Active to Passive Ownership
Many investors reach a point where they no longer want the responsibilities that come with direct property ownership.
Rather than managing tenants, maintenance requests, vacancies, and property managers, a 1031 exchange can provide a path into professionally managed multifamily real estate.
Diversify Beyond a Single Property
A 1031 exchange can provide an opportunity to move capital from a single property into a larger multifamily investment, potentially reducing concentration risk and providing exposure to professionally managed assets.
Continue Building Wealth Through Real Estate
Many investors want to maintain exposure to real estate while reducing day-to-day involvement. A 1031 exchange can help make that transition possible.
How to Complete a 1031 Exchange with Break of Day Capital
Step 1: Sell Your Investment Property
The 1031 exchange process begins when you sell an investment property.
Before closing, you’ll need to engage a Qualified Intermediary (QI) to facilitate the exchange and hold the sale proceeds. Taking possession of the funds yourself can disqualify the exchange.
Common qualifying properties include:
- Single-family rental properties
- Apartment buildings
- Commercial real estate
- Industrial properties
- Land held for investment
We recommend consulting your CPA, attorney, or Qualified Intermediary to confirm eligibility.
Step 2: Engage a Qualified Intermediary
A Qualified Intermediary serves as an independent third party who holds the proceeds from the sale of your property and helps facilitate the exchange in accordance with IRS regulations.
Your QI is responsible for:
- Holding exchange proceeds
- Preparing exchange documentation
- Tracking critical deadlines
- Facilitating the transfer of funds
Because the QI plays such an important role, investors should engage one before the sale closes.
Step 3: Identify Replacement Property (45-Day Deadline)
One of the most important deadlines in a 1031 exchange is the 45-day identification period.
Within 45 days of selling your property, you must formally identify potential replacement properties.
If you’re considering investing with Break of Day Capital, we encourage you to contact us as early as possible so we can discuss:
- Available opportunities
- Investment minimums
- Exchange requirements
- Timing considerations
Waiting until the end of the identification period can significantly limit your options.
Step 4: Review Available Break of Day Capital Opportunities
Once you’ve identified potential replacement property, our team will work with you to determine whether one of our multifamily investments may be a fit for your exchange.
During this stage, we’ll discuss:
- Your exchange timeline
- Available investment opportunities
- TIC structure requirements
- Minimum investment amounts
- Coordination with your QI and advisors
Our goal is to help you understand the process and make an informed decision.
Step 5: Complete Your Investment (180-Day Deadline)
The IRS requires investors to complete the acquisition of their replacement property within 180 days of selling the relinquished property.
Once you’ve selected an investment, our team will coordinate directly with you, your Qualified Intermediary, and your advisors throughout the closing process.
We work to make the experience as smooth and efficient as possible while helping ensure all exchange requirements are satisfied.
Step 6: Enjoy the Benefits of Passive Multifamily Ownership
Many investors use a 1031 exchange as an opportunity to transition from active property ownership into a more passive investment structure.
Rather than managing tenants, maintenance, vacancies, and day-to-day operations, investors gain exposure to professionally managed multifamily real estate while continuing to benefit from real estate ownership.
Frequently Asked Questions
Can Break of Day Capital accept 1031 exchange funds?
Yes. Certain offerings can accommodate 1031 exchange investors, subject to investment minimums, legal structuring requirements, and offering availability.
Is there a minimum investment amount?
Yes. Because of the additional legal and administrative work involved, minimum investment amounts generally apply.
When should I contact Break of Day Capital?
As early as possible. Ideally, discussions should begin before your property sale closes.
Do you provide tax or legal advice?
No. We encourage all investors to work closely with their CPA, attorney, and Qualified Intermediary regarding their specific situation.
What if I am concerned about depreciation recapture?
Many investors are surprised to learn there may be strategies available to help offset taxes through bonus depreciation and future real estate investments. Ask our team about our educational guide on bonus depreciation and depreciation recapture.
Let's Discuss Your 1031 Exchange
Every exchange is unique.
If you’re considering selling an investment property and would like to explore whether a Break of Day Capital investment may fit your 1031 exchange strategy, we’d be happy to have a conversation.
Schedule a call with our team to discuss your options and upcoming exchange timeline
