The Like-Kind Advantage: Investor's Edge

Like-Kind and Non-Like-Kind Property

We are pleased to introduce Bill Exeter, CEO of Exeter 1031 Exchange Services, LLC as one of our nationwide investment expert partners. As a leading national provider of comprehensive 1031 Exchange services, Bill Exeter has contributed the following article from his 1031 Exchange Guidebook on our website to provide valuable insights for investors in the area of 1031 Exchanges.

The relinquished and replacement properties that are part of the same 1031 Exchange transaction must also satisfy the like-kind property requirement to qualify for 1031 Exchange treatment. 

Real estate will be considered like-kind property as long as all of your relinquished properties and replacement properties satisfy the Qualified Use requirement. This means that any real property will be considered like-kind to any other real property as long as all of the properties are held for investment purposes as discussed above.

Like-Kind Property

The following types of properties are representative of those that will generally qualify as like-kind real property: 

  • Single-family residential properties 
  • Multi-family residential properties 
  • Commercial office buildings 
  • Retail shopping centers or strip malls 
  • Industrial warehouses 
  • Vacant, undeveloped, or raw land 
  • Farm, ranch or timber land 
  • Oil and gas interests 
  • Mineral rights 
  • Water rights 
  • Air rights 
  • Tenant-in-common (TIC) investment properties (fractional interests) 
  • Delaware Statutory Trust (DST) investment properties (fractional interests) 
  • Properties held in Title Holding Trusts/Land Trusts (beneficial interests) 
  • Vacation rentals (see section on vacation properties) 

You can exchange between any of the asset classes referenced above as long as you satisfy the Qualified Use requirement. 

Non-Like-Kind Property

Certain types of properties are specifically excluded and are not considered to be qualified use and/or like-kind property for 1031 Exchange treatment. They include property held for personal use or sale (inventory), securities or security interests, and interests in an entity. Here is a detailed list: 

Personal Use Assets 

  • Primary residences 
  • Second homes 
  • Vacation homes (personal use) 
  • See section on second homes and vacation properties 

Property Held For Sale 

  • Property held for development and then subsequent sale 
  • Property acquired for conversion, then sale (e.g., condo conversions) 
  • Property acquired to fix-up or rehab and sell (flip) 


  • Cash 
  • Stocks 
  • Bonds 
  • Mutual funds 
  • Real Estate Investment Trusts (REITs) (except via an upREIT) 

Interests in an Entity 

  • Partnership interests in a general or limited partnership 
  • Membership interests in a limited liability company (unless it is considered to be a disregarded entity such as a single-member LLC) 
  • Shares of stock owned in a “C” or “S” corporation 

Vacation Properties and Second Homes

You can 1031 Exchange your vacation property or second home provided that you follow the safe harbor guidelines outlined in IRS Revenue Procedure 2008-16. The subject property must be held as investment property for at least 24 months, must be rented for a minimum of 14 days each year during the 24 months, and cannot personally be used for more than 14 days or 10% of the total number of days per year that you rented the property. 

Domestic or Foreign Property

Real property sold in one state may be exchanged for real property located in another state provided the properties are both located within the United States (i.e., they are all domestic real properties). 

You can only 1031 Exchange domestic (United States) real property for domestic real property. Non-domestic (foreign) real property can only be exchanged for non-domestic real property. Domestic real property cannot be exchanged for non-domestic real property because they are not considered to be like-kind.

We hope the insights provided by Bill Exeter of Exeter 1031 Exchange Services, LLC in this article have been informative and beneficial. We at CBC Capital Advisors are proud to partner with such a distinguished firm. Together, we are committed to facilitating a seamless 1031 exchange process for our clients. Our collaboration ensures that you receive comprehensive support and guidance, making your exchange experience as smooth and efficient as possible.

For the past 40+ years it has been our honor and pleasure to help clients achieve their investment goals through commercial real estate investing through…

  • Our Exclusive Nationwide Investment Network
  • Off-Market Commercial Real Estate Opportunities – Nationwide
  • and Saving Taxes with 1031 Exchanges

To Learn More, Give CBC Capital Advisors a Call at (806) 793-0888

In addition, you can learn all about our exclusive nationwide investing network and capabilities by watching Rick Canup’s short investment presentation below.