45 Day Identification Strategy
The 45-day identification window starts the day the relinquished property closes, and it does not pause for anything, including a slow week finding candidates. For an Illinois investor selling a Cook County apartment building or a downstate grain elevator, that means the property search really has to start before the relinquished sale closes, not after, if the list is going to reflect real candidates instead of whatever happens to be available on day 40 of the Illinois exchange.
Why Illinois's Split Market Makes This Window Feel Short
Forty-five days is tight in any market, but Illinois adds a wrinkle: an investor comparing a Chicagoland industrial building against a Peoria manufacturing property involves more than comparing prices, since it means comparing two submarkets with different brokers, different comparable-sale data, and different diligence timelines. Getting a serious look at both requires groundwork most Illinois exchangers have not started until the clock is already running, which is the single biggest reason identification lists end up thinner than they should be.
We start building a target list the moment an Illinois sale is likely, using broker relationships across the I-55 and I-80 corridors as well as downstate contacts around Bloomington, Champaign, and Springfield, so the 45 days are spent narrowing choices rather than discovering them from scratch.
Choosing Which Identification Rule to Use
Most Illinois exchangers use either the three-property rule, which allows up to three properties regardless of value, or the 200-percent rule, which allows more properties as long as their combined value stays under twice the relinquished sale price. The right choice depends on how many real candidates exist in a given Illinois submarket and how much backup optionality the investor wants heading into the 180-day closing period that follows identification. We usually make this call by week two of the 45-day window, once the shortlist has enough shape to know whether three strong candidates exist or whether the investor genuinely needs the flexibility of a longer list.
The Weekly Rhythm We Use Inside the 45 Days
- Week one: confirm the qualified intermediary is engaged and finalize the target list of asset types and submarkets
- Week two: tour or review the strongest candidates across Chicagoland and downstate
- Week three: narrow to a primary property plus realistic backups
- Week four: confirm financing feasibility and title status on the shortlist
- Final days: file the written identification notice with the qualified intermediary before the deadline
What a Late or Rushed List Costs an Exchanger
An identification filed in the last day or two of the window tends to name Illinois properties nobody has actually diligenced, which shows up later as financing surprises or title issues that could have been caught earlier. We would rather have an Illinois investor identify a slightly less exciting property that has been properly vetted than a perfect-looking Chicagoland building nobody had time to check before the 45-day deadline closed the list for good. A rushed list also tends to skip the property tax homework entirely, which is exactly the kind of detail that turns into an unpleasant surprise once the replacement Illinois property actually closes.
Coordinating the List With the Rest of the Exchange Team
An identification list is only as useful as the people who have to act on it once it is filed. We share the shortlist with the qualified intermediary, the investor's lender, and their CPA as soon as it starts to firm up, rather than waiting until day 45 to loop everyone in at once. That habit matters most on an Illinois exchange spanning more than one submarket, since a Chicagoland lender and a downstate community bank may need different lead times to issue a commitment letter, and finding that out on day 44 is far too late to do anything useful about it.
Sometimes the strongest early Illinois candidate falls through in week two, whether over price, financing, or a title problem, and the search has to widen quickly without blowing through the remaining days. We keep a secondary list of Chicagoland and downstate candidates warm throughout the window specifically for this reason, so a setback in week two does not turn into a rushed, thin identification by week six with no real alternative in hand.
Common 1031 Exchange Questions
When exactly does the 45-day clock start?
It starts on the day the relinquished property closes and sale proceeds transfer to the qualified intermediary, not on the day the investor decides to do an exchange.
Can an Illinois investor identify a property outside the state?
Yes, the like-kind rule for real property is broad and does not require the replacement to be in the same state, though many of our Illinois clients prefer to stay in-state for familiarity with local submarkets and property tax exposure.
What if nothing on the list looks strong by day 45?
The identification still has to be filed with whatever is available, which is why we push clients to start the search early rather than waiting for a perfect candidate to appear.
Does the identification notice have to go through the qualified intermediary?
Yes, the written identification needs to be delivered to the qualified intermediary or another qualifying party by the deadline, and a verbal or informal list does not satisfy the requirement.
Can a property identified in the first list be swapped out later within the window?
Yes, the list can be revised as many times as needed until the 45th day passes, after which it is locked regardless of what happens with financing or diligence afterward.
