Buy Before You Sell. Defer Your Taxes. Don't Miss the Deal.

A reverse 1031 exchange lets investors acquire their replacement property first — before the relinquished property sells. We fund the bridge loan that makes it possible.

In a standard 1031 exchange, you sell first, then buy. It's straightforward — but it's also limiting. In California's competitive market, the replacement property you want doesn't always wait for you to close the sale of your existing one.

A reverse 1031 exchange solves that problem. You buy the replacement property first, then sell the relinquished property within the IRS-required window. The capital gains deferral still applies. The tax advantage is preserved. And you don't lose the deal you want.

The challenge: most banks won't touch a reverse exchange. The title structure, the timing requirements, and the involvement of an Exchange Accommodation Titleholder (EAT) fall far outside conventional lending guidelines. That's where South County Capital comes in.

How a Reverse 1031 Exchange Works

Step 1 — Engage a Qualified Intermediary (QI) Before acquiring the replacement property, the investor works with a Qualified Intermediary to establish an Exchange Accommodation Titleholder (EAT) — a separate LLC that temporarily holds title to the replacement property on the investor's behalf. This is required so that the investor does not hold title to both properties simultaneously, as the IRS prohibits this.

Step 2 — Acquire the Replacement Property South County Capital funds a short-term bridge loan against the replacement property (held by the EAT). The investor typically needs a down payment of 25–35% of the replacement property's purchase price. If sufficient equity exists in the relinquished property, a cash-out refinance can provide those funds.

Step 3 — Identify and Sell the Relinquished Property The investor has 45 days from acquiring the replacement property to formally identify the relinquished property to be sold, and 180 days total to complete the sale.

Step 4 — Complete the Exchange Proceeds from the sale of the relinquished property are used to pay off the bridge loan and complete the exchange through the QI. The title to the replacement property transfers from the EAT to the investor. Capital gains tax is deferred.

Who This Is For

Real estate investors who've identified their replacement property before listing their existing one
Investors approaching the end of a standard 1031 exchange window who need to close the replacement immediately
Any investor who doesn't want to lose a deal while waiting for a sale to close

What South County Capital Provides

Short-term bridge financing for the replacement property acquisition
Fast closings — critical when 1031 timelines are involved
Experience working alongside Qualified Intermediaries, CPAs, and real estate attorneys
Asset-based underwriting — we focus on property value, not personal income
Flexible loan structures for complex transaction timelines