95% Rule Strategy

The 95% rule removes both the three-property limit and the 200% value ceiling, but in exchange the investor must actually acquire at least 95% of the total value identified. It is the least forgiving identification path, and we only recommend it for Orlando investors who have genuine reason to believe they can close on nearly everything they name.

We see the 95% rule considered most often when an investor is dividing a large START EXCHANGE REVIEW, say a downtown Orlando office building or a hospitality-adjacent parcel, across many smaller replacement interests and wants a list broader than the 200% rule would allow without pushing the aggregate value over the cap. It also surfaces when an investor is combining several DST allocations with a direct acquisition and the combined value of realistic candidates would otherwise exceed 200% of the START EXCHANGE REVIEW price.

• Model the acquisition value required to hit the 95% threshold
• Rank candidates by real closing probability instead of availability alone
• Confirm financing capacity across every likely acquisition
• Flag any candidate dependent on a single seller or a thin deal pool
• Build a written contingency plan if one candidate falls through

A 95% strategy depends on enough real, closeable inventory existing across the identified list at the same time, and Orlando's submarkets do not all move at the same pace. Medical office near Lake Nona and industrial space along the Beachline typically have deeper institutional interest and can move faster through underwriting than smaller hospitality-adjacent units, where seller pools are thinner. We weight the candidate list toward submarkets with real transaction depth rather than assuming every named property will close on schedule.

Investors sometimes drift into a 95% posture without realizing it, by identifying a long list of properties under the assumption that only three or a 200%-value subset actually count. If the combined value of every named property exceeds 200% of the START EXCHANGE REVIEW price, the 95% requirement applies whether the investor intended it or not. We flag that threshold before the identification letter goes out, not after.

Because the 95% rule turns identification into a near-mandatory acquisition target, we prepare the feasibility model, closing probability notes, and financing capacity summary for the investor's tax advisor before the letter is finalized. The advisor's confirmation on whether the acquisition burden is realistic should happen before day 45, not after the list is already committed.

Because a 95% strategy assumes nearly every named property closes, an insurance delay on even one candidate can jeopardize the whole exchange rather than just one deal. Florida's wind mitigation and flood zone underwriting can move slower on older hospitality-adjacent stock than on newer institutional product near Lake Nona, so we weigh insurance feasibility into the closing probability ranking for every candidate on the list, not only financing and seller reliability.

If feasibility modeling shows the acquisition target is genuinely at risk, the investor is better served switching to the three-property or 200% rule while there is still time to rebuild the list, rather than discovering the shortfall after identification has closed. We set a hard internal review date, several days ahead of day 45, specifically to make that pivot possible if the numbers do not support the strategy.

That review compares the feasibility model against updated broker and lender feedback gathered since the search began, since conditions on any one candidate can change meaningfully in just a few weeks.

What makes the 95% rule different from the three-property or 200% rule?

It removes both the property count limit and the value cap, but requires the investor to acquire at least 95% of the total value identified, which makes it the highest-commitment identification path.

Can an investor end up under the 95% rule without choosing it?

Yes. If the total value of identified properties exceeds 200% of the START EXCHANGE REVIEW price, the exchange is automatically held to the 95% acquisition requirement regardless of intent.

Why would an Orlando investor choose this strategy on purpose?

It fits cases where a large START EXCHANGE REVIEW is being divided across many smaller replacement interests, such as multiple DST allocations plus a direct acquisition, and a broader list is genuinely needed.

What happens if the acquisition falls short of the 95% threshold?

The exchange can lose favorable tax treatment on the value not acquired, which is why we test feasibility before the list is finalized rather than after identification closes.

Should a tax advisor be involved before this list is submitted?

Yes, given how unforgiving the threshold is. We prepare the feasibility numbers, but the investor's tax advisor should confirm the strategy is appropriate before the identification letter is sent.

Can insurance delays on one property jeopardize the entire 95% strategy?

Yes, since the strategy assumes nearly full acquisition of identified value. We factor insurance underwriting timelines into the closing probability ranking for every candidate rather than treating it as a separate concern.

How close to day 45 does the feasibility review happen?

We set an internal checkpoint several days ahead of the deadline, comparing the feasibility model against updated broker and lender feedback, so there is still time to switch strategies if conditions have changed.