Reverse 1031 Exchange Loans for California Investors 

In a standard 1031 exchange, you sell first and then race to find a replacement property. But in a competitive market, the right property often shows up before your current one sells. A reverse 1031 exchange lets you buy the replacement first and sell afterward, while still deferring your capital gains taxes.

The challenge is financing. Most banks won’t lend on a reverse exchange because of how title is held. Seth Swenson Mortgage Capital arranges reverse 1031 exchange loans from $1 million to $10 million with private lenders who understand the structure.

Talk to Seth: (415) 860-7384

Loan Terms at a Glance

Rates and terms are subject to change and depend on the property, borrower and lender approval. Loans are for business purposes and investment properties only.

How a Reverse 1031 Exchange Loan Works

1. Choose your exchange company

You’ll work with a qualified intermediary or exchange accommodation titleholder (EAT) of your choice. The EAT holds title to the replacement property during the exchange, as the tax rules require.

2. Buy the replacement property

The loan is underwritten based on you, the investor, but the EAT signs the loan documents and holds title. The loan is non-recourse to the EAT. You close on the new property without waiting for your current one to sell.

3. Sell your current property

You list and sell your existing property within the exchange deadlines, generally identifying it within 45 days and completing the sale within 180 days.

4. Complete the exchange and pay off the loan

The sale proceeds pay off the bridge loan and complete the exchange. Title transfers from the EAT to you, and your capital gains taxes remain deferred. You can then keep the property free and clear or refinance into long-term financing.

Example: How It Works in Practice

Say you own a rental property worth $1,500,000 and find a $2,000,000 apartment building you want as your replacement. The building won’t wait for your rental to sell.

• The EAT takes title to the $2,000,000 replacement property
• A reverse 1031 loan funds the purchase, qualified on equity, including the equity in your current rental
• You list the rental and sell it within the 180-day exchange period
• The sale proceeds pay off the loan, and title transfers to you

You secured the property you wanted, avoided a rushed sale, and kept the tax deferral.

This example is illustrative only. Actual loan amounts depend on the properties, appraisals and lender approval.

Who This Loan Is For

• Investors who have found a replacement property before selling their current one
• Owners who don’t want to be forced into a rushed sale or a poor replacement choice
• Investors trading up from residential rentals into commercial or multifamily property
• Borrowers who need equity-based financing without income verification

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 works with lenders who understand reverse exchange structures and can coordinate with your exchange company to close on time.

Frequently Asked Questions

What is a reverse 1031 exchange?

It’s a 1031 exchange where you buy the replacement property before selling the one you’re giving up. An exchange accommodation titleholder holds title to the new property until the exchange is complete.

Why won’t most banks lend on a reverse exchange?

Because the EAT, not you, holds title during the exchange. Private lenders who specialize in these loans underwrite you as the investor while the EAT signs the documents, with the loan non-recourse to the EAT.

Do you provide the exchange company?

No. You bring your own qualified intermediary or exchange accommodation titleholder. Seth will coordinate with them throughout the loan process.

Can I use the equity in my current property?

Yes. Equity in the property you’re selling can be used to support the loan.

What if my property takes longer than expected to sell?

Loan extensions are available. Keep in mind that the 1031 exchange deadlines are set by tax rules, so talk to your exchange company early about your timeline.

What credit do I need?

All credit profiles are considered, as long as there’s a reasonable exit strategy, typically the sale of your current property.

What if I’m buying a home to live in?

Reverse 1031 exchanges are for investment properties. If you’re buying a new primary home before selling your current one, see our Buy Before You Sell loans.

Seth Swenson Mortgage Capital provides financing and does not give tax or legal advice. Please consult your CPA, tax advisor and exchange company about your specific exchange.

Ready to Buy Before You Sell?

Call Seth at (415) 860-7384 or send a message with the replacement property, the property you’re selling, their values and your exchange company. He’ll tell you quickly whether the numbers work.