Context

A listing broker had been circling a North Park fourplex for two years. The owners, two retirement-age sellers, had owned it for more than three decades. The property had appreciated from a $220,000 basis to an expected sale price north of $2.1M, with adjusted basis below $200,000 after three decades of depreciation. Between federal capital gains, California's 13.3% state income tax, depreciation recapture, and NIIT, a straight sale would have handed a six-figure tax bill back to the government, on the sale of an asset the owners no longer wanted to manage.

“They weren't opposed to selling. They were opposed to the hit.”

The broker, who had sold another building for them years earlier, raised the possibility of a 1031 exchange into passive real estate and offered to bring LRC into the conversation. They asked for an introduction.

What we did

Week 1: Education
We met with the sellers, their broker, and their long-time CPA on a single call. Walked through the deferral mechanics, confirmed the basis math, and ruled out approaches that didn't fit (partial exchange, 721 UPREIT roll-up) in favor of a multi-DST structure. Their estate attorney joined a follow-up call two days later to confirm the trust structure carried cleanly across the exchange boundary.
Week 2–6: Listing and marketing
The broker listed the property. We stood back. Our job was to be ready when the contract closed.
Week 7: Contract executed
Buyer in place, closing scheduled for 45 days out. We activated APX 1031 as qualified intermediary.
Week 12: Relinquished property closed
Proceeds of roughly $1.95M net flowed to APX. The 45-day clock started.
Week 13–15: Identification
We built a replacement universe of eight candidate DSTs filtered for the sellers' stated preference: avoid anything tenant-concentrated, favor Class A multifamily and self-storage. Narrowed to three offerings. The sellers reviewed each offering memorandum with their CPA. Identifications were filed with APX on day 42 of the 45-day window.
Week 17: Replacement properties closed
All three DSTs funded within 10 business days of identification. Full deferral achieved.

What this looked like, numerically

Relinquished
Coastal California multifamily, 4 units, 32-year hold
Relinquished sale price
$2.1M
Net proceeds after costs
~$1.95M
Estimated tax liability avoided
~$640K
Replacement structure
3 DSTs across multifamily (Sun Belt Class A), self-storage (national portfolio), and net-lease retail (investment-grade tenant)
Sponsor diversification
Equity deployed across three sponsors; no single sponsor held more than 45% of portfolio
Hold horizon
5–10 years across the replacement holdings

Why it worked

The sellers understood the mechanics before the listing went live, because their broker did. No scrambling in the 45-day window. No drop-dead pressure to identify something they hadn't already evaluated. No behind-the-scenes negotiation between their CPA, attorney, and a DST rep they'd never met. Every professional was in the same conversation from week one, with the broker leading.

The broker kept the listing. The CPA kept the client. The attorney kept the trust. And the sellers walked away from the plumbing calls.

Footnote

All three case studies are composite, anonymized illustrations based on transaction patterns and structures LRC 1031 has coordinated. Names, exact dates, specific sponsors, and distinguishing property details have been altered or removed. The mechanics described (basis calculations, deferral categories, 45/180-day windows, DST structures) are factually accurate under current law. Every exchange is different: each seller's basis, depreciation, tax bracket, state, and estate plan change the specific numbers. Past transactions are not indicative of future results. DST investments carry risk including complete loss of principal, are illiquid, and are available only to accredited investors. Nothing here is tax, legal, or investment advice.