1031 Exchange and Reverse 1031 Exchange Loans for California Investors

A 1031 exchange lets you sell an investment property and roll the proceeds into a new one without paying capital gains tax — but the IRS gives you strict deadlines to work with. You have 45 days to identify a replacement property and 180 days to close. When the right property comes along before your old one sells, or when timing gets tight, private bridge financing keeps the exchange on track. Seth Swenson Mortgage Capital arranges bridge loans for forward and reverse 1031 exchanges, so you can move on a replacement property without losing your tax deferral or the deal. Talk to Seth: (415) 860-7384

Loan Terms at a Glance

Loan amounts	$1,000,000 to $20,000,000
Loan purpose	Bridge financing for forward and reverse 1031 exchanges
Loan-to-value	Up to 70% of the replacement property value
Rates	Starting at 9.00%
Points	1 to 2
Term	12 to 24 months
Payments	Interest-only, monthly
Minimum credit score	640
Property types	Residential investment, multifamily, commercial and mixed-use
Vesting	LLC or trust permitted; consult your QI and tax advisor

Rates and terms are subject to change and depend on the property, borrower and lender approval. Loans are for business purposes only. Consult a qualified intermediary and tax advisor before structuring a 1031 exchange.

Forward 1031 Exchange Bridge Loans

In a standard forward exchange, you sell your relinquished property first, then buy the replacement. The problem is that closings rarely line up perfectly. If you find your replacement property but haven't closed on the sale yet, or if the exchange funds are tied up in escrow, a bridge loan lets you close on the new property now and pay it off once your sale proceeds are released.

Reverse 1031 Exchange Bridge Loans

A reverse exchange flips the order — you acquire the replacement property before selling the relinquished one. The IRS requires a qualified intermediary to hold title to one of the properties through an Exchange Accommodation Titleholder (EAT) arrangement, and you have 180 days to complete the sale. A bridge loan funds the acquisition on the front end, with the relinquished property sale paying it off on the back end. Reverse exchanges are more complex than forward exchanges and require coordination between your lender, qualified intermediary and tax advisor. Seth works with borrowers who have that team in place and need the financing to move quickly.

Example: How the Numbers Work

Say you're selling a $2,000,000 rental property and want to roll into a $3,000,000 commercial building. Your exchange funds won't be released for three weeks, but the seller of the replacement property needs to close in ten days.

• Bridge loan at 70% LTV: $2,100,000
• Your down payment: $900,000
• Exchange proceeds pay off the bridge loan at close of your sale

The bridge loan gets you into the replacement property on time, preserves the exchange and is paid off with your 1031 proceeds when they're released. Figures are illustrative only. Actual loan amounts depend on the appraisal, property type and lender approval. Always work with a qualified intermediary and tax advisor to structure your exchange correctly. Estimate your numbers with our Loan Calculator →

Who This Loan Is For

• Investors completing a forward 1031 exchange who need to close on the replacement property before sale proceeds are available
• Investors doing a reverse 1031 exchange who need to acquire the replacement property before selling the relinquished one
• Investors who have identified a replacement property but face a timing gap between transactions
• Buyers who need to move faster than a bank can close to protect their exchange deadline

Why Work with Seth Swenson Mortgage Capital

Seth has worked in private money lending since 2003, including more than 25 years living and working in the San Francisco Bay Area. As a licensed California broker with access to over 50 private lenders, he knows which lenders are experienced with 1031 exchange timelines and can close quickly enough to protect your tax deferral. He works alongside your qualified intermediary and tax advisor to keep the financing piece from becoming the bottleneck.

Frequently Asked Questions

What is a 1031 exchange bridge loan?

It's a short-term loan used to bridge the timing gap between selling a relinquished property and closing on a replacement property, so you can meet IRS deadlines and preserve your tax deferral.

What's the difference between a forward and reverse 1031 exchange?

In a forward exchange you sell first, then buy. In a reverse exchange you buy first, then sell. Reverse exchanges are more complex and require a qualified intermediary to hold title through an Exchange Accommodation Titleholder arrangement.

Do I need a qualified intermediary?

Yes. A qualified intermediary (QI) is required by the IRS for both forward and reverse 1031 exchanges. Seth handles the financing; you'll need a QI and a tax advisor to structure the exchange correctly.

How fast can you close?

Private lenders can often close in days rather than weeks, which matters when you're working against the 45-day identification and 180-day closing deadlines.

What property types qualify?

Residential investment properties, multifamily, commercial and mixed-use properties. The replacement property must be held for investment or business use to qualify for a 1031 exchange.

Can I use a bridge loan for both legs of the exchange?

In a reverse exchange, the bridge loan typically funds the acquisition of the replacement property and is paid off when the relinquished property sells. Your QI and tax advisor will determine how the exchange is structured around the financing.

What are the loan limits?

Loans range from $1,000,000 to $20,000,000. For smaller residential investment properties, see our Fix and Flip Loans or Rental Property Loans.

Ready to Protect Your Exchange?

Call Seth at (415) 860-7384 or send a message with the replacement property address, purchase price, current value of your relinquished property and your exchange deadline. He'll tell you quickly whether the financing works and how fast he can close.