Every strategy on this page answers the same question: what do you do with a gain you would rather not hand to the IRS?
Some of these approaches defer the tax. One can erase it. All of them turn a taxable sale into income-producing real estate, and each suits a different kind of investor. The right fit comes down to three things: how long you can leave the money alone, how much control you are willing to give up, and whether you want income, growth, or diversification.
None of them is a free lunch. The tax deferral is real, but so is the illiquidity, and the sponsor's judgment matters as much as the tax code. What follows is the plain version of each strategy. Read the full page on any one before you commit.
Every one of these turns a taxable sale into real estate you own. The difference is what you are optimizing for.
The common threadDelaware Statutory Trusts
The DST is the default answer for a 1031 investor who is done managing buildings. You exchange your sale proceeds into fractional interests in institutional real estate, collect a monthly check, and never field another 3 a.m. maintenance call. The trade is control and liquidity. The sponsor runs everything, and your capital is committed for the full hold.
Income usually lands between 4.5% and 6%, and depreciation shelters part of it. This is a fit for owners with a large embedded gain and a genuine multi-year horizon. It is a poor fit for anyone who might need the money back early.
Explore the DST strategy →Opportunity Zone Funds
Opportunity Zone funds are the growth play. Reinvest a capital gain within 180 days, defer the tax, and hold for ten years to owe nothing on the fund’s appreciation. The catch is where the money goes: most OZ capital funds ground-up development, so expect little income during construction and a long lock-up.
This is patient money chasing upside, not a bond substitute. The 2025 law made the program permanent and reset the rules for investments made from 2027 forward, so timing now matters as much as underwriting.
Explore the Opportunity Zone strategy →Oil & Gas Royalties (1031)
Mineral and royalty interests are the income alternative when replacement real estate is scarce or richly priced. Because perpetual royalties count as real property, a 1031 exchange can roll into them and keep deferring the gain. Royalty owners pay no drilling or operating costs and take revenue off the top, with roughly 15% percentage depletion sheltering the income.
The honest downside is the commodity itself. Distributions rise and fall with oil and gas prices, and production declines every year, so both the income and the underlying asset deplete over time. Size it as a diversifier, not a core holding.
Explore the Oil & Gas strategy →Private REITs
A private, non-traded REIT is the hands-off way to own a diversified real estate portfolio. One investment spreads across sectors and markets, pays monthly, and carries the favorable pass-through tax treatment REITs are built on. On its own it is not a 1031 vehicle, but a property owner can contribute assets into it through a 721 exchange.
Liquidity is the trade. Redemptions run through a share-repurchase program the board can cap or suspend, so treat it as a multi-year holding rather than a place to park cash.
Explore the Private REIT strategy →721 Exchange (UPREIT)
A 721 exchange, often called an UPREIT, is the exit many DST and direct owners eventually take. Instead of selling, you contribute your property into a REIT’s operating partnership and receive units, deferring the gain. You give up a single building for a stake in a larger, diversified portfolio.
It is the cleanest way to trade a management headache for diversification without triggering the tax, and units can convert to REIT shares over time. The cost is finality: once you contribute, you cannot 1031 back out into a specific property.
Explore the 721 Exchange strategy →1031 Exchange
The 1031 exchange is the machinery under most of the strategies above. Sell investment real estate, identify a replacement within 45 days, close within 180, and defer the capital-gains tax. The rules are strict and the clock does not bend, which is exactly why pre-packaged options like DSTs and royalty funds have become the go-to replacement property.
Run in sequence, exchange after exchange, and capped by a stepped-up basis at death, the deferral can quietly become permanent. That is the quiet power of the whole approach.
Explore the 1031 Exchange strategy →