# 385. The 1031 Move That Lets You Buy Before You Sell

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Podcast: [The Commercial Real Estate Investor Podcast](https://stenobird.com/podcast/the-commercial-real-estate-investor-podcast-1247143)
Published: 2026-06-08T10:00:00+00:00
Episode link: https://www.tylercauble.com/podcast/episode385
Audio file: https://static1.squarespace.com/static/5c115fec9d5abbba78a23c93/t/6a27471da49e731fea3cbb1a/1780959048865/The+1031+Move+That+Lets+You+Buy+Before+You+Sell.mp3
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Duration seconds: 1547

## Resource

Key Takeaways Location for Flex/Industrial Don’t go “main & main” in the city core (too expensive, competing with retail/office). Target major highways/arterials just outside town , where you can serve multiple submarkets at lower land/building cost. Pricing & Strategy Your all‑in cost/sf (purchase + rehab) must be well below new construction cost (~$120–$150/sf) or the deal won’t compete. Quick screen: if all‑in ≈ $100/sf and you can get ~$12/sf NNN , that’s about a 12% yield on cost → worth deeper underwriting. Kansas City Example Deal 4,260 sf building at $315K (~$74/sf) in Raytown; concept: split into two bays , add another roll‑up door, light rehab. Verified via Google Street View that there’s no real loading dock despite the listing. Underwriting Outputs (base case) Assumptions: 25% down, 7% interest, 20‑yr am, 2 tenants at $12/sf NNN, 3% bumps. Results: ~16–17% IRR , ~19–20% annualized cash‑on‑cash , ~2.0x equity multiple over 5 years, DSCR ~1.7x . Risk & Stress Test Even with rents at $10/sf and rehab at $100K , deal still modeled at mid‑teens IRR and solid cash‑on‑cash. But in a bear scenario (lower rents, higher vacancy, worse exit cap), you can lose money → need margin. Capital Raising Raising capital starts with your existing network : Call people, explain your deal type and target returns , and ask if they’d want to see one. Build a list of soft commitments before you have a live deal.

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