To qualify for a 1031 exchange, both the property being sold and the replacement property must be held for investment or used in a trade or business. Step 1: While contemplating the sale of an investment property, contact 1031 Pros.The San Jose office handles all 1031 Exchange Qualified Intermediary services for the IPX1031 Northern California region. Jonathan is very patient, informative and helpful as he assists you navigating this complex, but valuable 1031 exchange tax law tool. (API), we'll assist you in deferring capital gains taxes. Select a Qualified Intermediary and Open an Exchange. A reverse 1031 exchange enables you to buy first and sell later, giving you additional flexibility otherwise not feasible with a 1031 like-kind exchange. A reverse 1031 exchange enables you to buy first and sell later, giving you additional flexibility otherwise not feasible with a 1031 like-kind exchange. Engaging a Qualified Intermediary (QI) before selling the relinquished property. Both properties must be held for use in a trade or business or for investment.