How to Use a 1031 Exchange to Invest in North Carolina Real Estate
If you’re selling an investment property this year, you could be staring down a sizable tax bill. Section 1031 of the IRS tax code lets you defer those capital gains taxes when you reinvest the proceeds into a new qualifying property.
At Henderson Investment Group, we simplify the 1031 exchange process. It doesn’t matter if you’re upgrading to a larger property, diversifying your portfolio, or simply repositioning your assets; we’ll guide you through each step, doing so with compliance, efficiency, and confidence.
What Is a 1031 Exchange?
A 1031 Exchange, based on Section 1031 of the Internal Revenue Code, is a powerful tax-deferral strategy that allows real estate investors to sell an investment property and reinvest in a like-kind property without incurring immediate capital gains taxes.
A properly executed 1031 allows you to roll profits into a new property, preserving your full purchasing power and helping you grow wealth without losing momentum to taxes. It’s a game-changer for investors scaling portfolios.
This isn’t a loophole… It’s a well-established, IRS-approved tool that real estate professionals and institutional investors have used for decades to compound returns, upgrade into higher-value assets, and reposition their holdings across growth markets like Charlotte.
To qualify for a full tax deferral, you must meet three critical requirements:
- Identify Replacement Properties Within 45 Days – From the day your relinquished property closes, you have just 45 calendar days to formally identify up to three new properties you intend to purchase. These must be submitted in writing to your Qualified Intermediary.
- Close Within 180 Days – You are required to complete the closing process on one or more of the specified properties within 180 days from the date of the initial sale. No extensions or exceptions shall be granted under any circumstances.
- Use a Qualified Intermediary (QI) – You cannot access the sale proceeds; a third-party QI must hold the funds throughout. If you control or receive the money, the IRS considers it taxable, and your exchange fails.
Miss one step, and the IRS treats your transaction as a standard sale, triggering capital gains and recapture taxes. That’s why most investors partner with experienced 1031 professionals to keep the process compliant, timely, and stress-free.
Our team helps North Carolina investors confidently execute 1031 exchanges, from finding replacement properties in Charlotte’s Wesley Heights, NoDa, Belmont, and South End to coordinating with your CPA and Qualified Intermediary so that you can focus on the upside.
Our team offers local market knowledge, deal sourcing, and hands-on management to meet IRS requirements and secure a better-performing asset than the one sold.
Why North Carolina Is a Great Place to Reinvest
Charlotte and its surrounding regions offer one of the most appealing markets for reinvestment in the country (and if you live here, you know why!).
Aside from stunning weather and landscape, prices are still below national averages, but appreciation potential is strong. The job market continues to expand, attracting both renters and homebuyers. Vacancy rates in Mecklenburg County sit at just 4.3%, while rent growth has averaged 4% annually over the past three years.
We can help you find properties that meet IRS requirements and generate income, regardless of the property’s location in the Carolinas.
HP Makes It Easy
Our team helps identify viable replacement properties quickly, mainly because many of which are not yet listed publicly. We work with several Qualified Intermediaries and will coordinate directly with your CPA, title company, and legal team to guarantee everything stays on track and that you remain satisfied with the process.
Do you need to reinvest in multiple smaller assets? We can help split the exchange into a diversified portfolio. Perhaps someday you’ll want to trade up to a bigger, better rental? We’ve got that covered too!
Best of all, we handle leasing, management, and long-term oversight—so your next investment doesn’t just meet IRS standards, it meets your income goals.
Keep More, Stress Less
If you’re considering selling, make sure you get the most out of your property.
Let’s put your equity to work for you in a way that benefits you and helps you sidestep that large tax bill.
Schedule a free 1031 exchange strategy call. Let’s discuss the potential of North Carolina real estate for your investment portfolio.