Tax Deferral for Single-Family Rentals
Single-family rentals (SFRs) have been a powerful vehicle for building long-term wealth for decades.
Accruit specializes in guiding investors through tax-deferred strategies that allow for the sale of existing rental properties and reinvestment into new single-family rentals or other qualifying property including passive real investments, while preserving equity and leveraging cashflow.
Whether scaling a rental portfolio, transitioning into new markets, or exiting active real estate investments, our experienced team ensures that your 1031 exchange is properly structured in accordance with IRS guidelines and executed seamlessly.
Multi-Property Exchanges
Traditionally, a 1031 exchange involves selling one property and reinvesting in one—or maybe more—replacement properties. It’s a powerful tax-deferral strategy, but it’s often constrained by complexity, timing, and limitations in scale.
With conventional 1031 exchanges, managing more than a couple of assets can be a logistical and compliance nightmare. Investors typically stick to one-for-one exchanges to avoid the risks and headaches of coordinating multiple transactions within tight deadlines. Exchange Manager Pro℠ changes that.
- Bulk uploads for properties
- Increased efficiency through improved process flow and single-entry data
- Simplified Document Creation: Auto-generates all required exchange agreements, assignment, and notifications
This platform enables investors to batch multiple assets into a single, seamless 1031 exchange, opening up a new level of flexibility, diversification, and efficiency.
Portfolio Management
Over time, real estate portfolios can drift from their original investment goals or compliance requirements. To stay aligned with strategic objectives and regulatory guidelines, periodic recalibration is essential—often involving the disposal of underperforming or non-conforming assets and reinvesting in properties that better support long-term growth and stability.
Common scenarios include:
- Exiting a specific geographic market that no longer aligns with its strategic focus, growth potential, or risk tolerance.
- Rebalancing the portfolio to maintain an optimal mix of asset types, locations, or risk profiles, REITs may dispose of certain properties and reinvest in assets that better align with current objectives.
- Underperforming properties that consistently require significant capital improvements may be sold to improve overall portfolio performance and reduce operational burden.
Access to Capital
1031 exchanges provide the opportunity to dispose of mature, highly depreciated, or low performing assets to free up capital for upcoming acquisitions, new improvements, or rehabilitation projects.
- Retain capital by deferring the gain and recapture tax
- Utilize retained gains as a source of capital for reinvestment
- Proactively manage return of capital events within the fund
Manage Tax and Distributions with a 1031 Exchange Program
Operationalize the disposition and acquisition of properties across the US by leveraging Accruit experience working alongside institutional investors to structure complex exchange programs through our state-of-the-art technology, Exchange Manager Pro℠.
Benefits
- Optimize portfolio by disposing of underperforming, low basis properties for more lucrative properties without tax implications
- Redeploy and leverage cashflow into more productive markets without a taxable event
- Rebalance portfolio markets per organizational guidelines
- Proactively manage distributions to REIT investors
Considerations
- Same taxpaying entity must dispose and acquire property for a valid 1031 Exchange
- Recommended holding period for a 1031 Exchange property is generally two years
- Generally, all real estate is like-kind to other real estate including raw land and improvements to new property
- Close of Relinquished and acquired properties can be simultaneous, or up to 180 days
The Process
Exchange Manager Pro℠ automates the 1031 Exchange process through embedded controls. All documents, data, and timelines are tracked and visible in real-time. Each transaction is accessible by all parties 24/7.
Exchange Manager Pro℠ technology makes the 1031 transaction workflow very smooth and fast in tracking all the deadlines, documents and at the end of the transaction it produces a final report which help with filing the 8824 forms for the reporting the transaction to the IRS.
– Chief Accounting Officer, REIT