1031 Exchange in Arizona: Rules, Requirements, and the Best Companies to Use

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:
  • 61% of realtors have handled at least one 1031 exchange transaction since 2016.
  • 12% of all sales transactions between 2016-2019 by realtors were 1031 exchanges.
  • 84% of 1031 exchange properties were held by small investors, up from 81% in 2015.

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 1031First American Exchange Company (First Am)Exeter 1031Old Republic Exchange Company – OREXCO
Year established1988199020051993
Member of the Federation of Exchange Accommodators?
Local offices
Company size100+ employees100+ employees50+ employees200+ 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 timeIf 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 marketSmaller 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 expertiseNational 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 exchangesIf 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 feesNational 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.

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