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

Last updated on July 26th, 2021 at 03:50 pm

Colorado’s 1031 exchange rules and regulations | Best 1031 exchange companies in Colorado  | Do I need to use a 1031 exchange company near me?

Colorado offers investors a dynamic environment for 1031 exchanges, rooted in a real estate market that’s shown steady growth for over a decade. 

Home prices in Colorado rose from $227,000 in May 2011 to $467,000 in April 2021, according to the Zillow Home Value Index

Colorado’s real estate market performance tracks with the state’s overall population growth. Colorado’s population grew 14.8% from 2010 to 2020, according to U.S. Census Bureau data. Experts project the state’s population growth will continue. 

It’s not just individual homeowners fueling Colorado’s real estate market, though. The state also features an: 

  • Effective property tax rate of 0.52 percent, third-lowest rate among the states 
  • Average rent of $868 for a one bedroom apartment
📈 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.

Colorado’s 1031 exchange rules and regulations 

Colorado’s exchange regulations go a bit further than other states. 

The state created these regulations to protect investors. As a result, Colorado 1031 exchanges are considered safer than their counterparts in other states.

🏠 A 1031 exchange primer
If you’re considering a 1031 exchange in Colorado, you’re probably familiar with the basic rules. But if you need a refresher, check out our definitive guides:

In 2009, the state’s legislature passed HB09-1254, which means qualified intermediaries (QIs) conducting 1031 exchanges in Colorado must:

  • Maintain a $1 million or more fidelity bond, and an errors and omissions insurance policy of at least $250,000. Alternatively, the QI can deposit client funds in an escrow account where both client and intermediary need to authorize withdrawals. The client must provide a written authorization for a withdrawal if the escrow account holds more than $250,000.
  • Notify clients within two days of any change in ownership of an asset.
  • Act as a client fiduciary at all times for the 1031 exchange funds.

Qualified intermediaries in Colorado are also prohibited from:

  • Keeping client exchange funds in the same account as operating funds 
  • Loaning client funds to anyone other than an exchange accommodator titleholder

In addition, Colorado requires sellers to set aside money for taxes on income from that property. To satisfy this rule, investors executing a Colorado 1031 exchange must sign an “affirmation of reasonably estimated tax to be due.” 

This notifies the state that you won’t owe taxes, since you’re deferring them through the 1031 exchange.

To navigate all these rules and opportunities, you’ll want to pick the right company for your needs. Our team identified the best 1031 exchange companies in Colorado for you to choose from. 

The 7 best 1031 exchange companies in Colorado

The following chart highlights each Colorado 1031 exchange company's key details. You'll find in-depth profiles of each company below.
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1031x1031 CorporationAccruitExpert 1031Exchange Resource GroupAsset Preservation Inc.First American Exchange Company
Year established1994199020002002200719901990
Member of the Federation of Exchange Accommodators?
Local offices
Company size6 employees7 employees25+ employees2 employees6 employees58+ employees100+ employees
Cost of deferred 1031 exchange$1,000n/an/an/a$850+$1,000-$2,000$1,000
Cost of a reverse 1031 exchange$5,000-$7,000n/an/an/a$4,000+varies$10,000-$15,000 plus fees

*The Federation of Exchange Accommodators is the national trade association for 1031 exchange practitioners, and sets industry guidelines and standards

1031x

1031x offers a digital approach to the 1031 exchange, so if you’re a tech-savvy investor who doesn’t need a lot of (or any) face-to-face time, the company could be a great fit. It’s a small-ish outfit with great reviews, and the founders have extensive industry experience. While 1031x has offices in Colorado and Texas, the company is a nationwide provider with extensive business outside of the Centennial State.

1031x also stands out for its simpler fee structure than most of its competitors.

Year established: 1994

Locations: Denver and Texas, but the company’s customer experience is entirely remote and it offers services nationwide

Website: https://1031x.com/

Leadership: Christopher T. Sayre, Vice President

Member of the Federation of Exchange Accommodators? Yes

Rating: A+ on Better Business Bureau

Company size: Six

Staff strengths: Founders are licensed attorneys and real estate brokers

Costs for common types of 1031 exchanges: Deferred 1031 exchange: $1,000; reverse 1031 exchange: $5,000-$7,000

Is the client’s money separated or commingled with others? Separated. Funds are never commingled or invested

Bonded and insured? Yes. In addition to standard FDIC insurance, the company can provide up to $150 million in additional insurance.

Expertise: 1031x offers reverse 1031 exchanges with a simpler fee structure than most competitors.

1031 Corporation

1031 Corporation is one of the three oldest 1031 exchange companies in Colorado. Headquartered in Longmont, it’s a good option for Colorado investors who want to work with a local provider. 

1031 Corporation has a versatile staff of seven, which is experienced with standard 1031 exchanges as well as regional specialties like oil and gas 1031 exchanges. 

Year established: 1990

Locations: Longmont, CO, and nationwide

Website: https://www.efirstbank1031.com/

Leadership: Kelly Lacert, Department Manager (15 years)

Member of the Federation of Exchange Accommodators (FEA)? Yes

Rating: A+ on Better Business Bureau

Company size: 7

Staff strengths: Many staff members are certified exchange specialists, which means they’ve passed an FEA exam. As a subsidiary of FirstBank, the second-largest bank in Colorado, the company’s financial services and financial security are definite strengths. 

Costs: Deferred 1031 exchange: n/a; reverse 1031 exchange: n/a

Is the client’s money separated or commingled with others? Separated

Bonded and insured? Yes

Expertise: All staff work with multi-property, delayed, and reverse 1031 transactions. The company also performs oil and gas 1031 exchanges.

Accruit

Accruit’s large, specialized staff features in-house CPAs and attorneys, who help handle nearly every type of 1031 exchange. The company has stellar reviews. Although Accruit performs 1031 exchanges all over the U.S., it’s based in Denver. 

Year established: 2000

Location: Denver and nationwide

Website: https://www.accruit.com/

Leadership: Brent Abrahm, President and CEO (21 years)

Member of the Federation of Exchange Accommodators? Yes

Rating: A+ on Better Business Bureau

Company size: 25+

Staff strengths: One CPA, four attorneys, five certified exchange specialists, and an IT team are available for client support.

Costs: n/a

Is the client’s money separated or commingled with others? Separated

Bonded and insured? Yes

Expertise: According to its website, Accruit handles all types of 1031 exchanges, including forward exchanges, deferred exchanges, improvement exchanges, and built-to-suit exchanges. The company also can guide you through Delaware Statutory Trusts and situations with multiple relinquished properties.

The 1031 Exchange Experts

The 1031 Exchange Experts managing partner Gary Gorman wrote a well-reviewed book on 1031 exchanges. With a small staff of two, the company has dual offices in Colorado and Arkansas. It also offers 24/7 service. 

Year established: 2002

Location: Greenwood Village, CO, and Arkansas

Website: https://www.expert1031.com/

Leadership: Gary Gorman, Managing Partner (20+ years)

Member of the Federation of Exchange Accommodators? Not listed

Rating: A+ on Better Business Bureau

Company size: Two

Staff strengths: Gorman wrote a book on 1031 exchanges, and worked for more than 10 years at Big 6 CPA firm PricewaterhouseCoopers.

Costs: n/a

Is the client’s money separated or commingled with others? Separated

Bonded and insured? Yes

Expertise: Expert 1031 has substantial experience with delayed, reverse and improvement 1031 exchanges, and managing partner Gorman authored a book on 1031 exchanges. 

Exchange Resource Group

Exchange Resource Group (ERG) has handled over 12,500 1031 exchanges since its founding in 2007. One of the co-founders is an ex-real estate judge, so it’s clear the company has significant institutional knowledge and expertise. 

With average fees on the affordable end of the spectrum, and offices in Colorado, Florida, and Texas, they’re a solid option for a wide-spectrum of investors.

Year established: 2007

Locations: Lakewood, CO, as well as Florida and Texas

Website: https://www.erg1031.com/

Leadership: Drew McCabe, President (14 years)

Member of the Federation of Exchange Accommodators? Yes

Rating: 5/5 stars on Birdeye (15 reviews)

Company size: Six

Staff strengths: Co-founder McCabe has experience as a judge in real estate law, and the team features additional legal and real estate expertise. 

Costs: Deferred 1031 exchange: $850+, reverse 1031 exchange: $4,000+

Is the client’s money separated or commingled with others? It’s separated into individual segregated dual signatory accounts in an Federal Deposit Insurance Corporation (FDIC)-chartered commercial bank, so the funds are FDIC-insured.

Bonded and insured? The company has errors and omissions coverage

Expertise: Delayed, construction, and reverse 1031 exchanges

Asset Preservation, Inc. 

Asset Preservation, Inc. (API) handled more than 5,000 exchanges in 2020, and boasts a large staff of certified exchange specialists. The company offers clients a “letter of assurance” that guarantees satisfactory service.

Year established: 1990

Locations: Denver, Palmer Lake, CO, and nationwide

Website: https://apiexchange.com/

Leadership: Javier G. Vande Steeg, President and CEO (20+ years)

Member of the Federation of Exchange Accommodators (FEA)? Yes

Rating: A+ on Better Business Bureau

Company size: 58 

Staff strengths: Many API employees are certified exchange specialists, which means they’ve passed an FEA exam.

1031 transactions last year: 5,000+

Costs: Deferred 1031 exchange: $1,000-$2,000; reverse 1031 exchange: varies

Is the client’s money separated or commingled with others? Separated

Bonded and insured? Yes

Expertise: API has experience with all types of 1031 exchanges, including delayed, improvement and reverse 1031 exchanges.

First American Exchange Company 

First American Exchange Company (First Am) serves clients nationwide, performing nearly all types of exchanges. The company has attorneys and CPAs on staff. As a subsidiary of First American Title, the company’s financially stable.

Year established: 1990

Locations: Nationwide

Website: https://www.firstexchange.com/

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, with CPAs often available

Costs: Deferred 1031 exchange: $1,000; reverse 1031 exchange: $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 errors and omissions insurance coverage

Expertise: First American performs all types of 1031 exchanges, and the company’s website highlights its experience with deferred, reverse, improvement, and simultaneous exchanges.

Do I need to use a 1031 exchange company near me?

If you live in Denver, a Denver-based 1031 exchange qualified intermediary (QI) might be convenient, but it’s not a must. 

You can use a 1031 exchange company based in Denver, Colorado Springs, or Boulder — or even one located out of state. The rules of a 1031 exchange don’t require you to use a qualified intermediary near you.

Keep in mind, though, that Colorado has unique state laws governing Colorado 1031 exchanges, so if you do use an out of state qualified intermediary, make sure they pay special attention to Colorado’s laws.

Let’s look at some of the pros and cons of using a local Colorado QI or a national QI.

Using a qualified intermediary near you for a Colorado 1031 exchange

✅ Pros❌ Cons
Knowledge of Colorado 1031 exchange regulations likely strongerIf you own property out of state, they may not be familiar with that state’s 1031 exchange regulations
Familiarity with local market can be useful if you have to sell quickly when closing in on the 180-day deadlineFees may be higher than larger national QI companies
Network of local providers (title services, notaries, attorneys, etc.) can help close a sale ahead of deadlineSmaller network to tap into in case of unusual problems

Using an out-of-state qualified intermediary for a 1031 exchange in Colorado

✅ Pros❌ Cons
National scope of experience can be valuable if you own property in multiple statesMay not be familiar with Colorado’s 1031 exchange regulations
If unusual problems come up, their potentially more extensive network may come in handyLack of familiarity with local market could put you in danger of missing the 180-day deadline, if your sale takes longer than planned
Larger companies may offer lower feesLikely won’t be able to recommend local construction contractors, tax experts, attorneys, etc.

Choosing your QI marks the first in a long series of decisions when you’re doing a 1031 exchange. 
Always do your research to ensure you’re making informed choices. Contact us today and we’ll set you up with one of our experienced 1031 exchange experts for a free consultation.

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