Last updated on June 23rd, 2021 at 03:00 pm
Arizona’s 1031 exchange rules and regulations | Best 1031 exchange companies in Arizona | Do I need to use a 1031 exchange company near me?
Arizona’s real estate market is red hot.
Median home values in Arizona have more than doubled over the past decade, from $137,000 at the end of 2011 to $333,000 in April 2021, according to Zillow’s Home Value Index.
Phoenix, which has seen its population grow by 20% since 2000, has been one of the hottest markets in the U.S. over the past decade. Maricopa County, which encompasses Phoenix, is the nation’s fastest growing county.
In this market, Arizona 1031 exchanges are a popular way for investors to protect their profits from capital gains taxes and depreciation recapture taxes — and that’s true nationally, too.
| 📈 1031 exchange trends According to a July 2020 report from the National Association of Realtors:
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Arizona’s 1031 exchange rules and regulations
Arizona doesn’t have any state-specific regulations governing 1031 exchanges.
Whether you’re doing a Phoenix 1031 exchange, a Maricopa 1031 exchange, or a Mesa 1031 exchange, you’re going to be playing by the same rules as investors across the U.S.
| 🏠 A 1031 exchange primer If you’re considering a 1031 exchange in Arizona, you probably know the basics of the transaction. But if you need a refresher, check out our definitive guides: |
The 4 best 1031 exchange companies in Arizona
Our team researched 1031 exchange companies in Arizona and picked the best. You’ll find detailed breakdowns of each company below this at-a-glance chart.
| IPX 1031 | First American Exchange Company (First Am) | Exeter 1031 | Old Republic Exchange Company – OREXCO | |
|---|---|---|---|---|
| Year established | 1988 | 1990 | 2005 | 1993 |
| Member of the Federation of Exchange Accommodators? | ✅ | ✅ | ✅ | ✅ |
| Local offices | ✅ | ✅ | ✅ | ✅ |
| Company size | 100+ employees | 100+ employees | 50+ employees | 200+ employees |
| Cost deferred 1031 exchange | $1,000+ | $1,000 | $899 | $950 |
| Cost of a reverse 1031 exchange | $6,000+ | $10,000-$15,000, plus fees | $6,850+ | $7,000+ |
*The Federation of Exchange Accommodators is the national trade association for 1031 exchange practitioners, and sets industry guidelines and standards
IPX 1031
With offices in Chandler, Phoenix, and Tempe, this 1031 exchange company delivers a solid local choice for most Arizona investors. Established in 1988, IPX 1031 has stellar reviews and a large, experienced staff.
IPX’s fees are affordable, and the company specializes in reverse 1031 exchanges and improvement 1031 exchanges, making them a go-to for investors looking to execute these less-common transactions.
Year established: 1988
Locations: Chandler, Phoenix, Tempe, and nationwide
Leadership: John Wunderlich, President (10 years)
Member of the Federation of Exchange Accommodators? Yes
Rating: A+ on Better Business Bureau
Company size: 100+
Staff strengths: Commercial real estate and legal experience
Costs: Deferred: $1,000+; reverse: $6,000+
Is the client’s money separated or commingled with others? Separated
Bonded and insured? Yes. $100 million fidelity bond, and $30 million in errors and omissions coverage
Expertise: IPX 1031 has a division that specializes in reverse 1031 exchanges and improvement 1031 exchanges.
First American Exchange Company
First American Exchange (First Am) is a subsidiary of First American Financial, a Fortune 500 company, so it has significant financial backing to go with substantial industry experience.
First Am performs all types of 1031 exchanges, and touts staff attorneys in all their offices. With fees close to or slightly below the industry average, First Am offers an affordable choice, too.
Year established: 1990
Locations: Phoenix and nationwide
Leadership: Carmine DiFulvio, Senior VP (15 years)
Member of the Federation of Exchange Accommodators? Yes
Rating: A+ on Better Business Bureau
Company size: 100+
Staff strengths: Attorneys on staff in all offices nationwide, and CPAs are often available
Costs: Deferred: $1,000; reverse: $10,000-$15,000, plus fees
Is the client’s money separated or commingled with others? Separated
Bonded and insured? Yes. $20 million fidelity bond, and $10 million in errors and omissions coverage
Expertise: First American performs all types of exchanges.
Exeter 1031
Independently owned Exeter 1031 is based in California, but does significant business in Arizona and the rest of the U.S.
Investors who work with Exeter can utilize the company’s on-site notary services, as well as some legal services.
Exeter’s fees are affordable, and the company has stellar reviews. Exeter’s also offers their trademarked “Zero Equity 1031 Exchange” on rental properties that have no cash equity.
Year established: 2005
Locations: Phoenix and nationwide. The company’s headquarters are in California.
Leadership: William “Bill” Exeter, President (two years)
Member of the Federation of Exchange Accommodators? Yes
Rating: A+ on Better Business Bureau
Company size: 50+
Staff strengths: On-site notary services and limited legal services
Costs: Deferred exchange: $899; reverse exchange: $6,850
Is the client’s money separated or commingled with others? Separated
Bonded and insured? Yes. $5 million fidelity bond, and $5 million in errors and omissions coverage
Expertise: In addition to the most common 1031 exchanges, Exeter also offers the “Zero Equity 1031 Exchange” on rental properties that have no cash equity.
Old Republic Exchange Company
Publicly traded company Old Republic Financial owns and backs Old Republic Exchange Company (OREXCO), so the company’s on solid financial footing. It’s a large company that does business all over the U.S., and many members of its staff are certified exchange specialists.
While the company’s fees are reasonable, investors should note OREXCO is the only company on this list that commingles client funds.
Year established: 1993
Locations: Scottsdale and nationwide
Leadership: Lori De Martini, CEO
Member of the Federation of Exchange Accommodators? Yes
Rating: A+ on Better Business Bureau
Company size: 200+
Staff strengths: Many members of the staff are certified exchange specialists
Costs: Deferred exchange: $950; reverse exchange: $7,000+
Is the client’s money separated or commingled with others? Commingled
Bonded and insured? Yes. $120 million fidelity bond, and $50 million in errors and omissions coverage
Expertise: OREXCO performs deferred, reverse, improvement, and simultaneous 1031 exchanges, as well as simultaneous 1031 exchanges — a company specialty and a rare offering among Arizona 1031 exchange companies.
Do I need to use a 1031 exchange company near me?
If you’re a Phoenix resident, a Phoenix-based 1031 exchange qualified intermediary (QI) might be a convenient option, but it’s not a must. A qualified intermediary from Mesa, Tempe, or Tucson works just as well.
Since Arizona doesn’t have any state-specific laws governing Arizona 1031 exchanges, you could even use a QI from out of state with no risk of working with someone who doesn’t know local rules.
Using a qualified intermediary near you for an Arizona 1031 exchange
| ✅ Pros | ❌ Cons |
|---|---|
| Smaller, local companies can offer personalized service and more face time | If you want to execute a 1031 exchange on property you own outside of Arizona, they may not know that state’s 1031 exchange laws |
| If you need to execute a quick sale to meet a looming 180-day deadline, local QIs may have a keen understanding of the market | Smaller businesses may charge higher fees |
| Local QIs can recommend reputable local service providers (title services, attorneys, tax experts, etc.) | Local QIs may not have the legal or logistical resources to handle complicated or unusual exchanges |
Using an out-of-state qualified intermediary for a 1031 exchange in Arizona
| ✅ Pros | ❌ Cons |
|---|---|
| If you need to do 1031 exchanges in multiple states, a national provider offers broader expertise | National QIs may have little or no experience in certain states |
| A QI with national scope and experience may be more capable of handling complicated or unusual exchanges | If your national QI isn’t familiar with the local market, it could complicate your sale |
| Larger companies can operate on lower profit margins, which potentially translates to lower fees | National QIs won’t be able to recommend local service providers (tax experts, attorneys, etc.) |
Finding a qualified intermediary for your Arizona 1031 exchange can be difficult! Contact us today and our seasoned 1031 experts will answer questions and walk you through the whole process.
