Additionally,

a
study
by
real
estate
analytics
firm


Parcl
found
that,
depending
on
the
metro
area,
anywhere
from
3%
to
8%
of
people
who
listed
their
homes
for
sale
in
September
2024
had
become
accidental
landlords
by
November
2024.

While
not
all
of
these
people
will
decide
to
continue
growing
their
roster
of

investment
properties,
some
will,
and
that
creates
the
opportunity
for
more
1031
exchanges. 

Under

Section
1031
of
the
U.S.
tax
code,
property
owners
can
avoid
paying
capital
gains
tax
on
the
proceeds
of
the
sale
of
an
investment
property
if
they
use
the
proceeds
to
purchase
another
non-primary
residence.

In
total,
1031
exchanges
represent
roughly
$100
billion
in
annual
transaction
volume,
yet
less
than
10%
of
eligible
real
estate
deals
take
advantage
of
1031s,
according
to

NAR
data. 

“The
process
is
so
outdated
and
document
intensive,
so
people
don’t
take
advantage
of
it,”
Judd
Schoenholtz,
the
co-founder
and
CEO
of
1031
exchange
firm

Deferred,
wrote
in
an
email.

These
difficulties
were
in
mind
when
Schoenholtz
—
along
with
co-founders
Alex
Farrill
and
Aaron
LaRue
—
created
Deferred,
a
qualified
intermediary
platform
that
handles
1031
exchanges. 

Like
other
qualified
intermediaries,
Deferred
holds
the
proceeds
from
the
sale
of
the
original
property
before
a
buyer
closes
on
their
new
property.
But
unlike
other
platforms,
Deferred
has
utilized

artificial
intelligence
to
automate
the
documentation
process
and
it
does
not
charge
customers
for
the
service.

Instead,
the
company
generates
revenue
by
collecting
interest
on
the
funds
it
holds.
Depending
on
the
sum
of
money
being
held,
it
will
share
a
portion
of
the
interest
generated
with
the
client. 

“By
making
1031s
more
accessible,
Deferred
will
enable
every
investor
to
exchange
into
new
properties
—
revitalizing
neighborhoods
and
fueling
economic
growth,”
a
company
blog
post
states. 

The
firm
recently
announced
that
it
secured
$3.6
million
in
seed
funding,
including
funds
from

venture
capital
firms

B
Capital
and

Fika
Ventures.
Additional
support
came
from
strategic
investors
including
executives
at

Ramp,


Zillow,

SoFi,


Compass,


Opendoor,

Plaid
and

Newfront.

“At
Deferred,
we’re
redefining
what
it
means
to
be
a
Qualified
Intermediary
by
combining
cutting-edge
fintech
infrastructure
with
deep
real
estate
industry
expertise,”
Schoenholtz
said
in
a
statement.
“This
funding
enables
us
to
expand
access
to
1031
exchanges,
ensuring
that
every
investor
—
not
just

institutional
players
—
can
leverage
this
powerful
wealth-building
tool.”

Deferred’s
funding
round
comes
just
months
after
the
company
closed
its
acquisition
of

Plenti
Financial,
formerly
known
as

1031
Exchange
Advantage.

Through
this
acquisition,
Deferred
gained
access
to
an
experienced
qualified
intermediary
that
has
facilitated
nearly
7,000
exchanges.
Plenti
Financial’s
former
leader,
real
estate
attorney
David
Greenberger,
now
serves
as
the
head
of
exchanges
at
Deferred.

Looking
ahead,
Schoenholtz
said
he
is
looking
forward
to
working
with
both
residential
and
commercial
real
estate
agents
and
brokerages
to
help
them
better
serve
their
clients’
1031
exchange
needs. 

Schoenholtz
and
his
co-founders
have
previously
built


Open
Listings,
which
was
acquired
by
Opendoor
in
2018,
and


Balance
Homes,
which
was
acquired
by


EasyKnock
in
2023.