What is a reverse 1031 exchange?
A reverse exchange buys the replacement property first and sells your old property afterward. Since you cannot hold title to both, an exchange accommodation titleholder "parks" the new property for up to 180 days while you sell. It works, but costs more and demands financing without your sale proceeds in hand.
Reverse exchanges exist for one reason: the right property will not wait. Farmland is the textbook case — a neighboring parcel or a specific vineyard block may come to market once in a generation. Under IRS safe-harbor Revenue Procedure 2000-37, an accommodation titleholder (typically an LLC created by your QI) takes title to the new property, and you have 180 days to close the sale of your old one and complete the swap.
The structural problem is cash. Your equity is still locked inside the unsold property, yet the parked purchase must be funded now. Banks dislike lending to an accommodation titleholder on a tight clock, which is why many reverse exchanges are bridge-financed: a short-term loan funds the purchase, the relinquished sale pays it down, and permanent financing follows if needed.
Expect roughly $5,000–$15,000 in additional QI and titleholder fees versus a standard exchange, plus carrying costs on the parked property. Reverse exchanges are unforgiving on structure — engage your QI and CPA before you sign the purchase contract, not after.
The Turnrow angle
Turnrow's 12–36 month bridge loans are built for the parked-purchase leg: up to 70% LTV, closing in 2–4 weeks, flexible prepayment so paying off early from your sale costs you nothing to worry about.
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