1031 exchange is not a mere tax bypass strategy. It’s a useful wealth creation principle. This exchange is popularly used by real estate investment moguls to grow their portfolios and increase net worth faster and efficiently.
By using 1031 exchanges, real investors can sell a real estate property and reinvest the proceeds into another real estate asset and sidestep any capital gains tax associated with the transaction. Let’s say, you are considering selling an investment or business asset and purchase another of its kind (like-kind property).
IRS allows you to structure the two transactions as a 1031 exchange to bypass capital gains tax and depreciation recapture tax. This means that you can invest 100 percent of your old property’s value into the new investment.
1031 exchanges are named for the IRS Section 1031 of the IRS’s tax code. The provisions of this section enable you to eliminate or reduce taxes on the sale of a real estate investment or business. If correctly used, they offer significant tax benefits for businesses or individuals selling or buying commercial real estate properties.
Until 22 December 2017, the 1031 exchange applied to personal property sales as well. However, the 2017 Tax Cuts and Jobs Act reviewed this, and now only real estate property assets qualify for 1031 exchanges.
Whereas the tax deferment provided by a 1031 exchange is an excellent opportunity for investors, the IRS Section 1031 has some complex points that may prove problematic if you do not understand all its working parts.
As a general rule of the thumb, consider seeking professional assistance from a qualified intermediary at every step of the process to avoid common pitfalls.
In this interest, we have made you a complete overview of a 1031 exchange, how it works, and essential steps (and everything in between) to keep you ahead of the curve. Have a look.
There are five different types of 1031 exchanges, each fitting different situations. These include:
In a typical real estate transaction, you can expect to incur combined taxes (state capital gain tax, federal capital gain tax, net investment income tax) of up to 40 percent of the capital gain when you sell an investment or property. However, the 1031 exchange allows you to defer capital gain taxes, enhance returns and facilitate portfolio growth on your investments.
In any 1031 exchange process it is important to consider working with a qualified intermediary, It helps you in the following ways:
For instance, if you accurately interpret the key term like-kind (usually thought to mean the same exact type of assets), you can identify great exchange possibilities that you might have otherwise overlooked.
Here are important steps and highlights about how a 1031 exchange works.
In a 1031 exchange, the first step is to identify the property you want to sell. This exchange typically applies to investment or business properties such as real estate and hotels. Your personal property, including a vacation home or a primary residence, may not qualify for a 1031 exchange.
The business property or investment you are selling and the replacement property have to be like-kind, which means they are of the same character, class, or nature but not necessarily the same grade or quality. You can exchange your hotel investment with another hotel or hotel real estate property.
Also, note that property outside the U.S is not considered like-kind to property inside the U.S.
The idea behind a 1031 exchange is that you are exempted from income tax/capital gain tax when you don’t receive any proceeds from the sale of your property. A good way to ensure that you don’t receive these proceeds (and incur hefty tax liabilities) is by working with a qualified intermediary, also known as an exchange facilitator.
Usually, a qualified intermediary holds the proceeds in escrow until the exchange is complete. Strive to exercise caution and perform due diligence when choosing a qualified intermediary. If your exchange facilitator flakes on you or goes bankrupt, you may lose money. An unreliable QI may also make you miss important deadlines and cause you to have complex tax implications.
Do you need a reliable qualified intermediary you can trust? JTAC (global experts in financial administration) has partnered with NewGen Advisory (America’s premier hospitality brokerage firm) to offer you a trusted partner you can count on throughout the exchange process and beyond.
IRS’s section 1031 does not really require you to reinvest all of the sale proceeds in a new investment. However, you will incur capital gains tax on the sale proceeds that you don’t reinvest in the like-kind property. You can only defer taxes on the portion you reinvest.
In the exchange process, you have to fulfill two deadlines, or the gain on the sale of your property will become taxable. In the first instance, you have 45 days after selling your property for you to identify potential replacement assets. This has to be done in writing and then notify the seller and your qualified intermediary.
Secondly, you will need to purchase the replacement property within 180 days of selling your old property.
You will also need to file the IRS Form 8824 in your tax returns. This form requires you to explain who was involved, describe the properties, provide a timeline and detail the money involved.
One of the main reasons you should consider a 1031 exchange is the tax benefits that come along with it. A 1031 exchange transaction allows you to sell a business property and defer paying the capital gains tax by buying a replacement property or properties.
This helps you reinvest the proceeds and keep the money working for you instead of paying out up to a third of that equity to Uncle Sam (the taxman/IRS). However, you will need to work with a qualified intermediary who will receive the funds in between the transactions.
When you transact using a 1031 exchange, you can significantly boost your cash flow and increase your income. For instance, you can sell a lower value, high maintenance, or underperforming property and invest in one that will make you more money, depending on your investment goals. Keep the money saved from the exchange and recommit it to your investment portfolio.
The strategy for obtaining, growing, or evolving a real estate portfolio is often unique to each person. However, the 1031 exchange is a great way for hotel investors to diversify or consolidate real estate investments and achieve their investment goals faster.
You can sell one of your hotel investment properties and then purchase a different or even multiple properties to diversify. This will help you spread out the risks of your investments and expand your business to new markets.
You can also use a 1031 exchange to consolidate your hotel investments portfolio as your investment goals change with time. Consider selling your properties that no longer fit your goals and purchase others that do.
Multiple properties with a lot of management and maintenance needs can make it difficult for you to focus on other projects that are important to you. A 1031 exchange allows you a hassle-free opportunity to get rid of time-consuming properties and buy hotel investments with a projected growth potential.
NewGen Advisory LLC is a full service commercial brokerage solutions company specializing in hospitality and lodging properties. We leverage state of the art marketing strategies to penetrate pools of qualified investors and owners.
Numerous complex transactions coupled with years of experience have provided us with a rare sixth sense for locating value and smart hotel investments. Our brokerage experience spans three decades, and we have represented over $1.5 billion worth of transactions in hotel sales. We are hoteliers ourselves; thus, we understand your needs and approach each transaction as our own.
All our transactions are based on the best interests of our clients—speed to close and maximum returns on investment. Our people-first approach and extensive network have resulted in sustainable partnerships and rendered us your go-to hotel brokerage company.
Our mantra is simple and on point; to help you make the most proceeds from the sale of your hotel properties. For more information on the 1031 exchange or inquiries on how we can help, feel free to Contact Us today and Let’s 1031.
Jourdyn leads the strategic marketing initiatives for NewGen Advisory, overseeing brand development, market positioning, communications, and business growth efforts across the firm.
With more than a decade of experience in marketing and business development, Jourdyn specializes in building brands, creating demand-generation strategies, developing thought leadership programs, and executing integrated marketing campaigns that drive measurable business results. Her expertise spans digital marketing, public relations, content strategy, events, social media, lead generation, and corporate communications.
At NewGen, Jourdyn is responsible for shaping and executing the firm’s marketing strategy, ensuring consistent brand visibility across all channels while supporting advisors, clients, and strategic initiatives nationwide. She works closely with leadership to develop campaigns, elevate industry presence, strengthen client engagement, and position NewGen as a trusted advisor within the hospitality investment sector.
Jourdyn holds a Bachelor of Arts in Mass Communication and Media Studies from Arizona State University and a Master of Business Administration (MBA) with an emphasis in Marketing from Grand Canyon University.
Most mornings you’ll find Jourdyn in the gym before sunrise and spending time with her husband and children.
Allysia Howerton joined NewGen Advisory in 2026 as a Pipeline & Transaction Assistant, relocating from St. Louis, MO to Arizona to take on the role. She brings a background spanning property management, client services, sales, and administrative leadership, with a track record of managing complex workflows and keeping transactions moving efficiently from inception to close.
Known for her organization, attention to detail, and relationship-driven approach, Allysia supports transaction management, pipeline coordination, and day-to-day brokerage operations — and is passionate about growing her career within the hospitality real estate industry.
Outside of work, she enjoys discovering new coffee shops and restaurants, traveling to experience new cultures, and spending time with her dogs.
2 years
Josie Numedahl joined NewGen Advisory in July 2024 as a Real Estate Assistant (REA). Originally from Iowa, she relocated to Arizona to pursue her education, graduating from Grand Canyon University in 2022 with a Bachelor’s degree in Marketing and Advertising.
Josie began her professional career as a recruiter in the finance and accounting sector, and brings that client-facing, detail-oriented background to her work at NewGen.
Outside of work, she enjoys reading, hiking, exploring local coffee shops, and spending time with friends.
X years
Anthony is the Staff Accountant for NewGen Worldwide, LLC and its subsidiaries Green Card Fund, LLC and NewGen Advisory, LLC, working directly under CFO Michael Lepore to handle day-to-day accounting functions across all NewGen operations.
Green Card Fund (greencardfund.com) is a USCIS-recognized EB-5 Regional Center authorized to raise foreign capital for domestic development projects. EB-5 investors fund community-need projects and receive an immigration benefit in exchange for job creation. To date, GCF has facilitated over $125 million in foreign direct investment, delivered immigration benefits to more than 250 families, and created over 2,500 jobs in healthcare, education, and hospitality across Arizona and Washington, D.C.
NewGen Advisory (newgenadv.com) is a full-service commercial real estate brokerage specializing in hospitality assets.
Prior to joining NewGen, Anthony completed coursework at Paradise Valley Community College before co-founding a family business that produced custom-wrapped die-cast model cars for corporate clients — handling vehicle customization, display stands, and branded packaging. Serving as Director of Operations, he gained hands-on experience in management, production workflows, and running a business from the ground up.
Outside of work, Anthony is a lifelong ice hockey player with a passion for motorsports — particularly motocross and classic cars. Among his favorites: the 1963 C2 Corvette Sting Ray, the 1965 Shelby Cobra S/C, and the 1971 Plymouth Hemi ‘Cuda. He hopes to one day own and operate a bookkeeping firm serving small businesses.
X years
Nick serves as Director of Operations for NewGen Worldwide and NewGen Advisory, bringing a detail-oriented, forward-thinking approach to supporting the company’s continued growth. A Minneapolis native, Nick studied at Denison University and the University of Minnesota before making his way to Arizona, where he now lives in Mesa.
He spent a decade in the hospitality industry as a server, bartender, and restaurant manager — hands-on experience that gave him a strong operational foundation and a natural fit within NewGen’s hospitality-focused business.
Outside of work, Nick is an avid writer with a passion for art, photography, and travel, and enjoys documenting his experiences through the lens.
X years
Nycole serves as Chief of Staff at NewGen Advisory, where she trains and manages the Real Estate Assistant (REA) team. She works closely with REAs to ensure agents receive consistent, high-quality support throughout every stage of a deal — from contract to close.
Alongside the Office Manager, Nycole leads onboarding for new agents, REAs, and team members across NewGen Worldwide’s subsidiaries, and has developed a training library to streamline the process for incoming staff. She is also actively involved in evaluating and implementing new platforms to improve agent and REA workflows, while providing leadership with the data needed to monitor KPIs and track revenue goals.
Her background in franchise operations management — spanning startups to scaling franchises — makes her a versatile and valuable member of the NewGen team.
20+ years
Michael is the Chief Financial Officer of NewGen Worldwide, LLC and its subsidiaries Green Card Fund, LLC and NewGen Advisory, LLC — a diversified real estate investment and capital solutions firm focused on creative, flexible solutions. Michael and his team oversee day-to-day accounting, budgeting, forecasting, and financial modeling across all NewGen operations.
Green Card Fund (greencardfund.com) is a USCIS-recognized EB-5 Regional Center authorized to raise foreign capital for domestic development projects. EB-5 investors fund community-need projects and receive an immigration benefit in exchange for job creation. To date, GCF has facilitated over $125 million in foreign direct investment, delivered immigration benefits to more than 250 families, and created over 2,500 jobs in healthcare, education, and hospitality across Arizona and Washington, D.C.
NewGen Advisory (newgenadv.com) is a full-service commercial real estate brokerage specializing in hospitality assets.
Prior to joining NewGen, Michael built over 20 years of experience in accounting, tax, and operations management serving small to mid-sized businesses. He holds active CPA licenses in both New York and Arizona. His career spans public accounting — including a role as Audit Manager at PricewaterhouseCoopers — as well as private accounting and business ownership, giving him a broad, hands-on command of accounting and management functions. That dual perspective allows him to bring both tax strategy and business strategy to bear when evaluating financial decisions. He is a member of the American Institute of Certified Public Accountants (AICPA) and the Arizona Society of Certified Public Accountants (ASCPA).
A proud Italian-American, Michael lives in Scottsdale with his wife, Patty, and their three children, Alyssa, Anthony, and Joey. Outside of work, he coaches ice hockey and has a passion for cooking Italian food.
X years
Kyle is a co-founder, Principal, and Chief Executive Officer of NewGen Worldwide, LLC and its subsidiaries Green Card Fund, LLC and NewGen Advisory, LLC — a diversified real estate investment firm focused on creative, flexible solutions. Beyond his broad responsibilities as CEO, Kyle’s primary focus is leading Green Card Fund, developing and implementing capital solutions domestically and internationally, and identifying attractive investment opportunities.
Green Card Fund (greencardfund.com) is a USCIS-recognized EB-5 Regional Center authorized to raise foreign capital for domestic development projects. EB-5 investors fund community-need projects and receive an immigration benefit in exchange for job creation. To date, GCF has facilitated over $125 million in foreign direct investment, delivered immigration benefits to more than 250 families, and created over 2,500 jobs in healthcare, education, and hospitality across Arizona and Washington, D.C.
NewGen Advisory (newgenadv.com) is a full-service commercial real estate brokerage specializing in hospitality assets — a natural evolution of NewGen Worldwide’s business model, built on business partners Girish Patel and Dan Rama’s lifetime experience in the industry. Kyle’s financial acumen and creative approach to structuring deals help NewGen Advisory clients identify and secure profitable opportunities.
Kyle earned a B.A. in Interdisciplinary Studies from Arizona State University with a focus in Business and Urban Planning. He has long been involved with the Greater Phoenix Economic Council’s (GPEC) International Leadership Council, and in 2016 was elected to the Board of Directors of Invest in the USA (IIUSA), the national EB-5 trade association, where he actively contributes to legislative reform efforts and the permanent reauthorization of the EB-5 program.
Kyle splits his time between company offices in Phoenix, AZ and Washington, D.C. Outside of work, he is an avid reader, global traveler, and snowboarder — and after logging over a million miles as a passenger, he has recently taken to the cockpit, learning to fly himself.
20+ years
Girish Patel is a co-founder and Principal of NewGen Worldwide, LLC and its subsidiaries Green Card Fund, LLC and NewGen Advisory, LLC — a diversified real estate investment and capital solutions firm focused on creative, flexible solutions across hospitality and healthcare. Among his core responsibilities are leading strategic initiatives, overseeing financial management, and driving real estate investment acquisitions.
Green Card Fund (greencardfund.com) is a USCIS-recognized EB-5 Regional Center authorized to raise foreign capital for domestic development projects. EB-5 investors fund community-need projects and receive an immigration benefit in exchange for job creation. To date, GCF has facilitated over $125 million in foreign direct investment, delivered immigration benefits to more than 250 families, and created over 2,500 jobs in healthcare, education, and hospitality across Arizona and Washington, D.C.
NewGen Advisory (newgenadv.com) is a full-service commercial real estate brokerage specializing in hospitality assets — a natural evolution of NewGen Worldwide’s business model, grounded in Girish’s and business partner Dan Rama’s lifetime experience in the industry. Having grown up in his family’s hotel business as an immigrant, Girish developed a bottom-up understanding of hospitality — mastering operations before becoming an investor, lender, and consultant. That ground-level perspective, tested across multiple economic cycles, underpins his 20+ years as a successful business owner and brings a distinctive depth of insight to NGA’s clients and investors.
Committed to continuous learning and giving back, Girish established the RC Patel Memorial Scholarship for students pursuing careers in real estate investment. He also serves on the Board of Directors of Global Ties Arizona, an organization that strengthens international relationships by making exchange programs more impactful.
X years
Dan is a co-founder and Principal of NewGen Worldwide, LLC and its subsidiaries Green Card Fund, LLC and NewGen Advisory, LLC — a diversified real estate investment and capital solutions firm focused on creative, flexible solutions. His primary role is leading NewGen Advisory and serving as its Designated Broker in Arizona.
Green Card Fund (greencardfund.com) is a USCIS-recognized EB-5 Regional Center authorized to raise foreign capital for domestic development projects. EB-5 investors fund community-need projects and receive an immigration benefit in exchange for job creation. To date, GCF has facilitated over $125 million in foreign direct investment, delivered immigration benefits to more than 250 families, and created over 2,500 jobs in healthcare, education, and hospitality across Arizona and Washington, D.C.
NewGen Advisory (newgenadv.com) is a full-service commercial real estate brokerage specializing in hospitality assets — a natural evolution of NewGen Worldwide’s business model, built on Dan’s and business partner Girish Patel’s lifetime experience in the industry. Throughout his career, Dan has been involved in the disposition of over $600 million in hospitality assets, advising clients on acquisitions, mergers, and divestitures across the United States.
Dan began his career as a hotel operator and owner in 1994 following his studies at the University of Arizona, going on to build a portfolio as a franchisee of Red Brick Pizza, Holiday Inn, Ramada Inn, and Comfort Suites. He holds General Manager Certifications from Holiday Inn, Motel 6, and Days Inn, and is a Certified Hotel Owner (CHO) with a Certification for Hotel Industry Analytics (CHIA).
Beyond his company responsibilities, Dan is an active industry voice. He serves as an Ambassador with the Asian American Hotel Owners Association (AAHOA) — the largest hospitality owners association in the U.S. — and previously served as its Southwest Regional Director. He also sits on the Board of Directors of the Arizona Lodging and Tourism Association (AZLTA).
Dan lives in Gilbert, AZ with his wife, Chetna, their son Suraj, and their daughter Sonya. Outside of work, he enjoys golf and cheering on the Denver Broncos.
15+ years
Suraj is the Chief Legal Officer of NewGen Worldwide, LLC and a member of its senior leadership team, where he contributes to the operational management and strategic planning of the company and its subsidiaries — including Green Card Fund and NewGen Advisory. NewGen Worldwide is a diversified firm engaged in real estate investments, creative capital solutions, and advisory services for the entrepreneurial investor.
Suraj first served as outside counsel for Green Card Fund and NewGen Worldwide from 2008 to 2014 before joining the organization as Chief Legal Officer. In this role, he leads the company’s legal, regulatory, and corporate governance functions, with responsibility spanning real estate, risk management, contractual relations, and investment strategies. He also oversees the business administration of NewGen Advisory, a full-service commercial real estate brokerage specializing in hospitality assets.
Prior to joining NewGen, Suraj was Managing Partner of Bhakta & Associates, PLLC, a full-service business law firm where he represented a broad range of clients across acquisitions and sales, corporate structuring, contracts, franchise law, development and construction, and equity and debt financing.
A native of Ohio, Suraj graduated from The Ohio State University in 1999 with a B.S. in Business Administration and earned his J.D. from Case Western Reserve University in 2002. He resides in Peoria, AZ with his wife, Neena, and their two sons, Shiv and Soham.
