Entrepreneurs on Fire Tips and Tricks of the 1031 Exchange with Dave Foster: An EOFire Classic from 2022
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Feb 28, 2026 Dave Foster, founder and CEO of The 1031 Investor and accountant, explains the mechanics of Section 1031 and tax-deferred property swaps. He shares timelines, qualified intermediary essentials, and strategic moves from high-appreciation to higher-cash-flow markets. Practical stories and planning tips highlight how to use 1031 exchanges for retirement and legacy planning.
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1031 Exchange Lets You Defer Real Estate Taxes
- A 1031 exchange lets real estate investors indefinitely defer capital gains and depreciation recapture taxes under IRC section 1031.
- Dave Foster explains you sell investment property, buy replacement investment property, and keep using the deferred tax to grow your portfolio.
How Dave Used 1031s To Buy A Sailboat And Avoid Taxes
- Dave bought a Denver duplex, sold it, then learned from his accountant about tax consequences and discovered the 1031 exchange after friends pointed him to a 1996 court law.
- He used 1031s to build a multi-location portfolio, buy a sailboat, live aboard, and never pay capital gains tax on sales.
Engage A Qualified Intermediary Before Closing
- Start the 1031 process before you close by engaging a qualified intermediary because you cannot touch sale proceeds.
- You have 45 days to identify replacement properties and 180 days to close, so plan replacements in advance.