Beyond Buy and Hold: Using 1031 Exchanges in Financial Planning - Rich Arzaga, CFP®, CCIM [Founder]

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Apr 1, 2026

Rich Arzaga, CFP® and CCIM, founder of Real Estate Whisperer Financial Planning, helps advisors integrate income real estate into financial plans. He breaks down 1031 exchanges, timing rules, matching value and debt, and the risks of taxable “boot.” He also covers selling active holdings for passive options, vetting intermediaries, and spotting exchange opportunities in planning.

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INSIGHT

1031 Exchange Basics And Tax Deferral

A 1031 exchange lets an investor swap one investment property for another without immediate tax on the sale.
Rich Arzaga explains it preserves equity by deferring federal and state taxes when rules are followed exactly.

ANECDOTE

Sevenplex To Passive Partnership Story

A Colorado couple converted a tiring sevenplex into a more passive partnership using a 1031 exchange.
They bought the sevenplex pre-COVID for under $300K and it appreciated to ~$1.3–1.4M, prompting a shift to less hands-on investing.

ADVICE

Match Or Exceed Value And Debt To Avoid Boot

Ensure replacement property equals or exceeds the sale price and debt to fully defer taxes.
Rich notes matching or increasing both the $1.3M value and $275K debt checks key IRS boxes to avoid taxable boot.

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In this episode of The Smarter Planner Podcast, host Belle Osvath, CFP®, welcomes Rich Arzaga, CFP®, CCIM, founder of Real Estate Whisperer Financial Planning.

Rich specializes in helping clients and advisors better understand how real estate fits into a comprehensive financial plan. With real estate representing a significant portion of household wealth in the U.S., he highlights a critical gap: many financial plans treat real estate as a static asset rather than an active planning opportunity.

In this conversation, Rich breaks down the fundamentals of 1031 exchanges and explains how they can be used to defer taxes when transitioning from one investment property to another.

Key topics-

What a 1031 exchange is—and how it differs from other "exchange" strategies
When a 1031 exchange may be appropriate for clients
The tax implications of selling investment property without a strategy
Key rules advisors should understand, including timing requirements and property guidelines
The concept of "boot" and how partial exchanges are taxed
How clients can transition from active real estate management to more passive investments
The importance of identifying tax exposure before recommending a strategy
Why selecting experienced partners (like qualified intermediaries) is critical

Rich also shares how advisors can identify opportunities within the financial planning process—whether clients bring the issue forward themselves or the advisor uncovers it through tax returns, cash flow analysis, or long-term planning projections.

He emphasizes that advisors don't need to become real estate experts but understanding the basics and collaborating with the right specialists can significantly improve client outcomes.

Guest Links Website: https://www.realestatewhisperer.com LinkedIn: https://www.linkedin.com/in/richarzaga

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The Smarter Planner Podcast is produced by the Financial Planning Association National Capital Area Chapter (FPA NCA) for educational purposes only. This content is not intended as investment, tax, or legal advice. Individual circumstances may vary.