The most difficult part of any 1031 exchange is the successful identification of potential Replacement Properties.
The IRS not only requires that the Exchanger's identification be submitted within the first 45 days of the exchange period, they additionally require that the identification be made using on of two identification rules or one exception.
The three property rule: You may identify up to three properties of any value.
The two hundred percent rule: You may identify more than three properties provided that all the combined property value you identify does not exceed two hundred percent of the value of the Relinquished Property.
The ninety-five percent excpetion: You may identify more than three properties and more than two hundred percent in combined identified value provided that the Exchanger acquires at least ninety-five percent of the value of properties identified.