Today's episode is admittedly unsexy—but it's one of those things I wish someone had explained to me in plain language before I needed it. We're talking about 1031 exchanges, which you've probably heard of if you own investment property, but might not fully understand unless you're an accountant or deeply embedded in real estate. This is for the rest of us—the cabin owners who've never sold a property before but are considering it, or anyone who wants to understand their options when it comes to the tax implications of selling an investment property without needing a finance degree to decode it.

I'm sharing our experience from this summer when we sold two properties and purchased one new property, intending to use a 1031 exchange to defer capital gains taxes and simplify our portfolio. The plan was straightforward: sell our cabin in Boone and our long-term rental in Durham, combine those funds, and buy a historic triplex in Boothbay Harbor, Maine—mortgage-free. Except two weeks before closing, I discovered something called "mortgage boot" that completely upended our strategy and forced us to restructure everything. We went from planning to own a property without debt that would generate significant monthly income, to taking on a mortgage we hadn't anticipated and dramatically changing our financial projections. If we had been relying on that rental income for monthly expenses, this would have been a crisis. Thankfully we weren't, but it was still a wake-up call about how much I didn't know.

In this episode, I walk through what a 1031 exchange actually is, the incredibly tight timeline you're working with (45 days to identify properties, 180 days to close), what qualifies as "like-kind property," and most importantly, what boot is and why mortgage boot specifically can derail your entire strategy if you're trying to simplify rather than expand. I also get honest about the privilege that allowed me to invest in real estate in the first place, my complex feelings about capital gains taxes and wealth redistribution, and why real estate investing appealed to me over traditional stock market investments after watching my mom save diligently for a retirement she never got to enjoy. Whether you're actively considering selling a cabin or investment property, curious about tax strategies, or just want to understand these financial tools better, this episode breaks it all down without the jargon—and hopefully saves you from making the same mistakes I almost made.

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