1031 Leverage Calculator

Start with Exchange Equity — the cash coming out of your sale after costs and any debt payoff. Then Exchange Debt, the mortgage that was on the property you sold. Leave it at 0 if you owned it free of debt. Those two are enough to see results.

It is the leverage on the property you sold — your old mortgage as a percentage of what the property was worth. Sell a $2,500,000 property carrying $1,500,000 of debt and it is 60%. That figure is the benchmark your replacement gets measured against. It is rounded to two decimals on screen but calculated to eight, and Match this LTV uses the full figure — on a large exchange that difference can matter.

It sets Replacement LTV to that exact figure in one click. A 1031 exchange generally expects you to replace your debt as well as your equity, and coming in below your old LTV can leave a shortfall that may be treated as taxable boot. This button matches your previous debt level without the arithmetic, using the precise figure rather than the rounded one shown on screen. Confirm your own situation with your tax advisor.

It shows what happens to your equity if the property’s value moves. Debt stays the same, so the entire change in value affects your equity — which is why the swing is larger than the percentage you type. At 70% leverage, a 1% move in value changes your equity by roughly 3.33%. That is leverage working in both directions.

Enter the forecast cash on cash from the offering you are considering to see the estimated income on your equity, annually and monthly. It is optional — leave it blank and nothing appears. The rate is the sponsor’s forecast and is not guaranteed.

Value After Change and Return on Equity are left blank under Property Sold because you no longer own that property. Those calculations apply only to the replacement property.