Selling an apartment building in Long Beach and planning a 1031 exchange can feel like racing two clocks at once. You want to defer taxes, protect value, and move into a stronger asset without missing a deadline. With the right plan, you can control the sequence, reduce risk, and keep your exchange on schedule. This guide breaks down the 45 and 180 day rules, the local escrow steps that affect timing, and how to coordinate your team so you close on time. Let’s dive in.
What starts your 1031 clock
Your timeline begins when you close on your relinquished property. That date is Day 0. From there, two strict federal deadlines apply and are measured in calendar days.
- The 45 day identification period starts on Day 1. You must identify your replacement property or properties in writing and deliver that notice to your Qualified Intermediary (QI) by the end of Day 45.
- The 180 day exchange period runs from Day 1 to Day 180. You must receive title to your replacement property by Day 180, or by the due date of your tax return for that year if earlier (confirm with your tax advisor).
Weekends and holidays count. Local escrow practices in Long Beach or Los Angeles County do not extend these federal deadlines.
How to identify replacement properties
Your identification must be written, signed, and delivered to your QI by Day 45. It should clearly describe each property, using exact street addresses or legal descriptions. Avoid conditional language that makes your identification ambiguous.
Three common identification methods are available:
- Three property rule: Identify up to three properties, regardless of value.
- 200% rule: Identify any number of properties if their total fair market value is no more than 200% of what you sold.
- 95% rule: Identify more than three or above 200%, then acquire at least 95% of the total identified value.
Many owners include backups to protect against failed negotiations or lender issues.
The 180 day exchange window
Identifying is only half the job. You also need to close on your replacement by Day 180. That means advancing due diligence, appraisal, underwriting, and closing tasks in parallel with your identification.
- Open replacement escrow early and make sure instructions allow the QI to deliver funds at closing.
- Confirm lender requirements for documentation, source of funds from the QI, and timing for appraisals and environmental reviews.
- Rate locks can expire. Coordinate lock windows with your expected closing date or have contingency financing ready.
If you do not close by Day 180, the exchange fails and the proceeds may become taxable.
Long Beach escrow timing factors
Local steps in Los Angeles County can affect scheduling. These do not extend the 45 or 180 day limits but can influence when you should close your sale and how you pace the purchase.
- Escrow lengths: Small multifamily (2–4 units) often close in 30–45 days. Larger apartment assets (5+ units and portfolios) commonly require 45–90 days. Complex or institutional deals may run 90–180 days.
- Tenant documentation: Expect time to compile rent rolls, estoppels, lease assignments, and security deposit ledgers. Coordination with property managers and tenants can add weeks.
- Title and recording: Recording and transfer processing at the County Recorder can add 1–5 business days on either side of closing. Clear payoff letters and title endorsements early to avoid last-minute delays.
- Local rules and notices: Long Beach and Los Angeles County landlord and housing ordinances can require specific notices or registrations at transfer. Confirm requirements with counsel or city resources before closing.
Plan buffers so these local steps do not push you against Day 45 or Day 180.
Step-by-step timeline you can follow
Below is a practical sequence for a Long Beach apartment owner who will sell, then buy.
1) Pre-listing setup: 2–6 weeks
- Engage your QI and tax advisor before listing. Confirm assignment language and identification procedures.
- Assemble a sale package: rent roll, 12–24 months of operating statements, leases, estoppels plan, payoff letters, insurance, environmental reports if available, and any site surveys.
- Talk to your lender if there is debt to be paid off at closing. Confirm payoff and reconveyance timing.
- If you may need to buy first, discuss a reverse exchange early with your accommodator and attorney.
2) Listing and offer
- Marketing and negotiation time varies. For multifamily, plan for buyer diligence and lender underwriting.
- Aim for an escrow period of 45–60 days on your sale so your team can compile tenant documents, clear title issues, and schedule closing with intention.
- Do not close your sale until you have progress on a replacement, such as an LOI, a term sheet, or an opened replacement escrow.
3) Sale escrow and diligence
- Open escrow. Provide the purchase agreement, tenant data, and payoff letters.
- Respond promptly to buyer requests. Tenant file reviews, environmental reports, and estoppels can take 1–3 weeks or more on larger assets.
- Confirm with title that endorsements and reconveyances are on track.
4) Close the sale: Day 0
- The transfer records and the QI receives proceeds. You do not take direct receipt of funds.
- Get written confirmation from your QI showing your Day 45 identification deadline and Day 180 exchange deadline.
5) Days 1–45: Identify in writing
- Deliver written identification to your QI. Use the three property rule, 200% rule, or 95% rule.
- Keep backups. If your first choice falls out, you will have alternatives within the rules.
6) Days 1–180: Advance the purchase
- Open replacement escrow. Share QI contact information, wire instructions, and exchange documents with escrow and the lender.
- Complete due diligence, appraisal, and underwriting. Monitor rate lock expirations and any environmental reviews.
- Aim to close well before Day 180 to avoid last-minute risk.
7) Close the purchase: By Day 180
- QI wires exchange funds to escrow. Title records with correct vesting. Keep all closing statements and exchange documentation for your files.
Coordination with your QI and lender
Your QI is central to the mechanics of the exchange, and your lender’s timeline often drives the critical path.
- Qualified Intermediary: The QI holds proceeds, issues identification receipts, and prepares exchange assignments and instructions. In a reverse exchange, an Exchange Accommodation Titleholder may be used. QIs facilitate the process but do not provide tax advice.
- Escrow alignment: Name the QI in your sale escrow instructions and provide the exchange agreement. For your purchase, deliver escrow contacts to the QI early so funds can be wired without delay.
- Lender alignment: Provide rent rolls and operating history quickly. Confirm the lender’s requirements for using QI funds and the documentation they need. Discuss debt changes with your tax advisor, since debt reduction can have tax consequences.
Risks to watch and buffers to build
Small missteps can trigger big consequences. Here are the common timing failures and how to mitigate them.
- Missing Day 45 or Day 180: Build buffers. Do not close your sale until replacement financing and main contingencies are well along. Confirm dates with your QI in writing immediately after closing.
- Ambiguous identifications: Use precise legal descriptions or full addresses. Sign and deliver identification to your QI before Day 45. Avoid conditional qualifiers.
- Constructive receipt of funds: Never take sale proceeds yourself. Escrow must wire directly to the QI per the exchange agreement.
- Financing delays: Get early lender reads, consider conditional commitments, and identify backup properties in case underwriting slips.
- Escrow or title delays: Ask about expedited recording, confirm transfer tax paperwork early, and provide documents to title promptly.
- Tenant document delays: Start estoppels and deposit reconciliations early. Use contract language that provides reasonable time to collect required tenant deliverables.
Quick seller checklist
Prepare these items early if you plan a forward exchange.
- Choose a QI and sign the exchange agreement before your sale opens escrow.
- Provide the sale purchase agreement, estimated closing statement, and loan payoff letters to escrow and the QI.
- Draft an identification notice template so you know exactly how and to whom you will deliver it.
- Compile buyer diligence materials: rent roll, 12–24 months operating statements, leases, security deposit ledger, environmental reports, survey or site plan, and any occupancy certificates.
- For the purchase, line up your loan commitment and replacement escrow instructions naming the QI as the funds source.
Should you consider a reverse exchange
If the right replacement becomes available before your sale is ready to close, a reverse exchange may preserve the opportunity. In that structure, an Exchange Accommodation Titleholder temporarily holds title while you complete the sale of your relinquished property.
Reverse exchanges are more complex and often more expensive. They require more lead time, often months, and careful coordination among the accommodator, escrow, lender, and your advisors. If you think you might need to buy first, start planning 60–120 days ahead.
Final takeaways for Long Beach owners
Your best advantage in a 1031 exchange is time you control before Day 0. Line up your QI, clean up your tenant and financial files, and push your replacement deal forward early. In Long Beach and across Los Angeles County, escrow, title, and tenant processes can add days or weeks, so build buffers that keep you comfortably ahead of Day 45 and Day 180.
If you want a clear, local game plan for your property and timeline, schedule a 1031 strategy call or request a valuation with Jack McCann.
FAQs
When does the 45 day clock start in a Long Beach 1031 exchange?
- It starts the day after your relinquished property closes and transfers (Day 1). Confirm the exact dates with your QI in writing.
Can you identify replacement properties before your sale closes?
- You can research and negotiate in advance, but formal identification must be written, signed, and delivered to your QI within 45 days after closing.
What if your replacement lender needs more time than expected?
- Lender delays are common. Coordinate early, manage rate locks, consider bridge options, and keep backup identifications within the 45 day rules.
Do LA County transfer taxes or recording delays change the 1031 deadlines?
- No. Local administrative steps do not extend the federal 45 or 180 day limits, so plan buffers to absorb any processing delays.
What exactly does a Qualified Intermediary do in a 1031 exchange?
- The QI holds proceeds to avoid constructive receipt, manages exchange documents and assignments, receives your identification, and wires funds to your replacement escrow.
Should you consider a reverse exchange if you need to buy first?
- Yes if timing demands it, but expect higher complexity, added cost, and longer lead time. Engage the accommodator and your advisors early.
