1031 Reverse Parked Cost Calculator

Reverse 1031 exchanges park property with QI — compute holding costs during parked period.

Replacement price

Bridge rate %

Monthly property NOI

Parked months

QI admin fee

Total parked cost

$45,833

Bridge interest

$73,333

Net carry cost

$37,333

How the math works

Bridge = price × rate × (months/12). Net carry = bridge − income. Total = net + QI.

$2M × 11% × 4/12 = $73k bridge − $36k income = $37k net + $8.5k QI = $45,833 parked cost.

How to Use

Enter replacement property purchase price.
Enter bridge loan rate %.
Enter parked property net income (monthly).
Enter parked duration months.
Enter QI administration fee.
Read total parked cost.

Frequently Asked Questions

What is a reverse 1031?

Reverse 1031 exchange under Rev. Proc. 2000-37 safe harbor: taxpayer acquires replacement property BEFORE selling relinquished property. QI (qualified intermediary) holds title to either relinquished or replacement property in 'exchange accommodation titleholder' (EAT) until relinquished sells. 180-day exchange period still applies. Allows securing replacement while buyer for relinquished is lined up.

Financing while parked?

EAT borrows funds (taxpayer's money or third-party bridge loan) to acquire replacement. Taxpayer guarantees loan. Property income during parked period goes to taxpayer (or offsets taxpayer's bridge loan). Title held by EAT = complicates conventional financing; most use bridge/hard-money lenders (Kiavi, RCN, Walker Dunlop, Greystone) at 9-14% rates. Conventional permanent financing happens AFTER relinquished closes.

Typical parked cost?

Bridge loan interest: 9-14% × 60-180 days. QI fee for reverse: $5-15k (vs $1-3k for forward). Legal: $10-25k. EAT setup fee: $2-5k. Property tax + insurance during parked: minor. Total parked cost on $2M replacement over 120 days: $80-130k. Often outweighs tax savings unless gain is very large ($1M+).

When is it worth it?

(1) Hot market where replacement must be locked before relinquished sells. (2) Complex property (apartment building, commercial) with specific buyer profile. (3) Large capital gain ($1M+) where tax deferral savings >$300-500k. (4) Institutional taxpayer with tax planning cushion. For smaller deals (<$500k gain), forward exchange with backup plan usually cheaper.