Using Real Estate Sale Proceeds as Search Fund Capital (Capital Gains, 1031 Exchange etc)

November 15, 2025

by a searcher from University of North Carolina at Chapel Hill in Charlotte, NC, USA

Hi everyone, I'm offloading at least one investment property to use as my search and acquisition fund. I am looking for creative ways to maximize the use of the proceeds and avoid the capital gains tax hit. I know that 1031 exchange is a popular approach but the timing seems near impossible to pull off in the 180 day post sale window. Does anyone have experience or thoughts on how to approach this?

Reply by an intermediary
from California State University, Northridge in Los Angeles, CA, USA

For a 1031 exchange, it's a like-kind exchange, so you'd have to re-invest the proceeds into another property in order to avoid the gains. I'm sure there are other ways (talk to a tax expert). Might want to look into opportunity zones.

Reply by a searcher
from University of Toledo in Shaker Heights, OH, USA

Not impossible, but requires timing and planning around transaction structure. A very long conversation should be had before contemplating this with your deal execution team.

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