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1031 Exchange Into Arizona Real Estate: 45-Day Identification & Cap-Rate Strategy

By Stephen R. Mannenbach, J.D., MBA · Licensed Arizona REALTOR® (ADRE #SA713873000 · HomeSmart LLC) · Brokered by HomeSmart LLC · 5 min read

Executive Takeaway (BLUF)

Out-of-state investors executing IRC Section 1031 tax-deferred exchanges into Maricopa County use the Three-Property Rule or 200% Rule during their strict 45-day identification window to redeploy low-yield coastal equity into high-growth Phoenix/Scottsdale residential rentals, small multifamily, and value-add assets.

Identification Deadline

45 Calendar Days from Relinquished Close

Closing Deadline

180 Calendar Days

Three-Property Rule

Up to 3 Replacement Targets Any Value

1. Pre-Identifying Backup Properties Before Day 30

Because inspection findings during Arizona’s 10-day due diligence window can kill a deal, savvy 1031 buyers always identify all three permitted replacement slots on Day 45 so they have pre-underwritten backups if Target #1 fails inspection.

2. Diversifying One Relinquished Sale Into Two Arizona Rentals

Exchanging a single appreciated California or Washington property into two newer East Valley or Scottsdale rentals diversifies vacancy risk while boosting depreciation basis.

Target Sale / Acquisition Price ($): $950,000Estimated Existing Mortgage Payoff ($): $410,000

Estimated Net Cash Proceeds at Closing

$473,975

• Est. Brokerage & MLS Marketing (5.0%): $47,500

• AZ Title, Escrow & Recording Fees: $9,025

• Seller Inspection / Closing Credit Buffer (1.0%): $9,500

Direct REALTOR® & Business Advisory Desk · HomeSmart LLC (ADRE #SA713873000)

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Prepared by our Licensed Arizona REALTOR® Desk (HomeSmart LLC · ADRE #SA713873000) for HomeDaddy AI clients.