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

Last updated on July 6th, 2021 at 10:24 am

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

Texas’s real estate market is one of the hottest in the U.S. Median home values nearly doubled in less than a decade, from $132,000 in 2011 to just under $236,000 in 2021, according to Zillow.

The state’s business-friendly regulatory environment has kept investment money flowing in so fast that the market can hardly keep up. In Houston, the pace of development was so heated that a developer who built small townhouses on a vacant lot sold them directly to a larger developer, who immediately tore down the brand-new townhouses and replaced them with a 730-unit apartment complex. 

In this red-hot environment, Texas investors interested in protecting their profits from federal capital gains taxes can turn to the 1031 exchange, mirroring national trends.

Texas’s 1031 exchange rules and regulations 

Texas doesn’t have any state laws governing or restricting 1031 exchanges. So whether you’re doing a Dallas 1031 exchange, an Austin 1031 exchange, or a San Antonio 1031 exchange, you’ll be playing by the same rules as investors anywhere else in the U.S. 

🏠 A 1031 exchange primer
If you’re considering a 1031 exchange in Texas, you probably know the basics. But if you need to brush up, check out our guides:

The 4 best 1031 exchange companies in Texas

Our team surveyed 1031 exchange companies in Texas from Beaumont to El Paso, and picked the best four in the state. 

The chart below offers a  quick reference guide, while below you’ll find detailed profiles of each of the companies.

Texas 1031 ExchangeIPX 1031Texas Escrow CompanyAsset Preservation Inc. (API)
Year established 1993 1988 1991 1990
Member of the Federation of Exchange Accommodators?*
Local offices
Company size 2 employees 100+ employees 500+ employees 58+ employees
Cost of deferred 1031 exchange n/a Starts at $1,000 n/a $1,000-$2,000
Cost of a reverse 1031 exchange n/a $6,000+ n/a Varies

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

Texas 1031 Exchange

The local, independently-owned company has offices in Texas and Oklahoma. Founded in 1993 by two real estate professionals who still run the company, Texas 1031 exchange offers standard 1031 exchanges, as well as variants of interest to Texas and Oklahoma investors, like farm, ranch, and livestock exchanges, or exchanges involving mineral, oil, or gas rights. 

Year established: 1993

Locations: Austin and Oklahoma

Website: https://texas1031exchange.com/

Leadership: Wayne H. Roitsch, President (15 years)

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

Rating: A+ on Better Business Bureau

Company size: Two

Staff strengths: Founders Roitsch and Sydney A. Miller are licensed real estate salespeople in the state of Texas. They’re also certified exchange specialists, which means they’ve passed the FEA exam.

Costs: n/a

Is the client’s money separated or commingled with others? n/a

Bonded and insured? Yes. Fidelity bond of $1 million (per occurrence), and $500,000 in errors and omissions coverage

Expertise: Texas 1031 Exchange offers more common 1031 exchanges (deferred, reverse, improvement, and combination) as well as regional specialties like farm, ranch, and livestock exchanges.

IPX 1031

IPX 1031 is a large and respected national player in 1031 exchanges, with offices in Austin, Dallas, Houston, and San Antonio. Investors are well served by a company this size, with little cause to worry about the company going bankrupt.  

IPX’s 1031’s expertise in reverse 1031 exchanges and improvement 1031 exchanges is of special note.

Year established: 1988

Locations: Austin, Dallas, Houston, and San Antonio, and nationwide

Website: https://www.ipx1031.com/

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 exchange: $1,000+; reverse exchange: $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 dedicated to reverse and improvement exchanges.

Texas Escrow Company 

Texas Escrow Company is primarily a title company, but it also offers 1031 exchange services. Its size and experience as a major title company in Texas gives them a lot of institutional knowledge about the Texas real estate market.

Year established: 1991

Locations: Texas

Website: https://www.republictitle.com/

Leadership: Carla Janousek, Senior Vice President 

Member of the Federation of Exchange Accommodators? No

Rating: n/a

Company size: 500+

Staff strengths: As a title company, it has substantial real estate experience across the entire team

Costs: n/a

Is the client’s money separated or commingled with others? n/a

Bonded and insured? Yes

Expertise: Texas Escrow Company is financially stable, and has substantial and diverse experience in the real estate industry. It can conduct delayed 1031 exchanges, reverse 1031 exchanges, improvement 1031 exchanges, and simultaneous 1031 exchanges.

Asset Preservation Inc. (API)

Summary: The high-volume exchange company has handled more than 180,000 1031 exchanges since the company’s founding in 1990. With stable leadership — APIs president and CEO has served for more than twenty years — offices in Austin and Houston, and solid reviews, the company’s a safe choice for most Texas investors. 

Year established: 1990

Locations: Austin, Houston, and nationwide

Website: https://apiexchange.com/

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

Member of the Federation of Exchange Accommodators? Yes

Ratings: A+ on Better Business Bureau, 3/5 stars on Google (2 reviews)

Company size: 58 

Staff strengths: Many API employees are certified exchange specialists, which means they’ve passed the Federation of Exchange Accommodators exam.

Costs: Deferred exchange: $1,000-2,000; Reverse 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 exchanges, including the most common delayed 1031, improvement 1031, and reverse 1031 exchanges.

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 since 2016 have been 1031 exchanges.
  • 84% of 1031 exchange properties were held by small investors, up from 81% in 2015.

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

If you live in Southlake, using a Dallas-based 1031 exchange company is convenient — but not required. A 1031 qualified intermediary in Austin, Houston, or San Antonio could do a great job, as could a company based outside Texas. 

The truth is, you don’t need to use a local qualified intermediary (QI). But, in some cases, you may want to. 

Let’s look at the pros and cons of using a local Texas or national 1031 exchange company.

Using a qualified intermediary near you for a Texas 1031 exchange

✅ Pros❌ Cons
Familiar and comfortable with local market dynamicsIf you’re also interested in exchanging properties outside Texas, your QI may not be familiar with that state’s regulations
Able to engineer a quick sale if you’re up against the 180-day deadlineSmaller companies may do fewer transactions, so their fees may be higher than high-volume national companies.
Likely has a proven network of local providers to help execute your exchange smoothlyLess institutional experience to handle unusual obstacles

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

✅ Pros❌ Cons
Investors who own property in multiple states will often get more varied experience with a national companyMay not understand local market dynamics
Extensive institutional experience and built-out professional network can handle almost any problemLack of local experience can result in low sale prices or delays that endanger the 1031 exchange’s 180-day deadline
Higher volume of transactions can translate to lower feesMay not be able to recommend reputable local service providers

Choosing the right qualified intermediary for your Texas 1031 exchange can make the difference between a smooth, profitable exchange, and one that’s delayed or even invalidated. 
Contact us today and we’ll put you in touch with one of our seasoned 1031 exchange experts, who’ll listen to your needs and recommend the best course of action.

Call Now ButtonCall Now (949) 409-6585‬