Why We Invested in Deferred: Making 1031 Exchanges Accessible to All Investors

If you’ve ever sold real estate, you’ve probably heard of a 1031 exchange, also known as Section 1031 of the U.S. tax code. It’s one of the most widely used strategies for real estate investors to defer taxes while continuing to build wealth.

The concept is simple: if you swap one property for another without cashing out, you aren’t taxed on your paper gains. This rule has been part of the tax code since 1921, and it has fueled trillions of dollars of real estate activity over the past century.

Growing up in Arizona’s pre-recession housing boom, I heard about 1031s often. My mom was a real estate agent, so I was closer to it than most, but even with that exposure, the process always seemed confusing, expensive, and out of reach.

That confusion isn’t rare. Despite the clear benefits, fewer than 10% of eligible real estate sales today use a 1031 exchange.

Why? Not because it’s a bad idea. Not because it’s inapplicable. Not because it’s risky. Simply because too few people know about it, understand it, and have access to tools that make it easy to execute.

Enter Deferred.com.

Backing a Team Built for This Opportunity

The team behind Deferred (Judd Schoenholtz, Aaron LaRue, and Alex Farrill) have worked together for years, across multiple startups and successful exits. I have known this group for many years and feel lucky to finally have the opportunity to partner with them in a company. It’s not often you see three co-founders who complement each other’s strengths so naturally and work together so fluidly. After building and selling Open Listings to Opendoor and Balance Homes to EasyKnock, they came together to tackle what they saw as one of the most underserved, greenfield opportunities for real estate investors: the 1031 exchange.

Instead of layering technology onto a broken system, they reimagined the Qualified Intermediary (QI) from the ground up. By combining consumer education, ease of use, AI, and a no-fee solution, they are building something better and more importantly, something more accessible.

Deferred’s approach was to both build proprietary and novel technology, while also partnering with a long-standing, trusted Qualified Intermediary. In Q4 2024, Deferred acquired Plenti Financial (also known as 1031 Exchange Advantage) founded and led by real estate attorney David Greenberger who brings over 30 years of experience. Now fully integrated into the Deferred platform, Plenti’s unrivaled expertise and shared obsession with client satisfaction is represented by their 100% 5-star ratings over nearly 7,000 exchanges.

If Deferred succeeds, 1031 exchange usage shouldn’t sit under 10 percent. It should be closer to 100 percent, unlocking millions of dollars in tax savings and reinvestment power for everyday investors (and growing the market potential significantly).

Why Deferred’s Product Stood Out: Building the Infrastructure the Industry Lacked

Most traditional QIs still run on email threads, paper forms, and offline banking systems.

Deferred raised the bar by creating a platform purpose-built for modern investors.

Here’s how Deferred stands out:

• Software-Driven and AI-Native From Day One: Deferred rebuilt the 1031 exchange process into a real-time digital workflow. This approach simplifies the steps, automates tax compliance, and removes manual bottlenecks.
• AI That Does the Heavy Lifting: Their proprietary engine, ARTE (Advanced Real Estate Tax Expert), automates the most complex parts of the compliance and documentation process. This reduces risk, saves time, and makes exchanges far more user-friendly.
• Robust Security of Funds: Instead of pooled, opaque accounts, Deferred holds client funds in FDIC-insured, fully segregated accounts through trusted banking partners. Investors always know exactly where their money is and that it is protected.
• And perhaps most importantly, a business model that aligns with their customers: No Fee Exchanges. Traditional QIs profit from hidden fees and by quietly pocketing the interest earned on client funds. Deferred flips that model by eliminating exchange fees entirely and sharing part of the interest income back with clients.

By removing the traditional exchange fee altogether, Deferred makes the process more affordable, more transparent, and more accessible to everyday investors. By sharing interest income back with clients, they have realigned incentives around trust and long-term partnership, not hidden costs.

The Market Opportunity: A Massive Untapped Segment

1031 exchanges account for over 100 billion dollars in annual real estate transaction volume. Yet fewer than one in ten eligible transactions take advantage of them today. The opportunity to make the existing 10% better is massive, and the opportunity to educate the remaining 90% is even better.

At Fika, we look for subject matter experts rethinking overlooked categories and tackling industries where outdated systems hold back real value. Deferred fits that mold perfectly.

They are not just making 1031 exchanges easier. They are opening the door for every investor to use one of the most powerful wealth-building tools available. 1031s are just the start.

We are thrilled to be backing Deferred and even more excited for what’s ahead.

If you are thinking about a 1031 exchange, or just curious how it could work better, check out Deferred.com.