Hi everyone... I'm new to this forum, thanks for having me. I'm in a little bind and need some help related to a 1031 exchange where a Qualified Intermediary is holding $113,344.93 of my money. Looking for some advice. It's this group- http://www.qualifiedintermediary.net/ (moderator, i hope it's ok to list the company, i would like to verify it's not a scam). I closed on a new property today at 3pm (EST). i told this Hetsler group last wednesday, 8/2/17 that today was the closing. I reminded them on Friday, 8/4/17 and was told the funds would be wired into the account that night. Didn't happen. I was told today by 10am the funds would be in the account. Again, didn't happen. Was told 2pm, didn't happen. They're dogging my calls and will not return emails/ or any correspondence related to this transaction. I had a friend go by their "office" and it is a Regus key man office space. What are my options related to access to the funds to make sure they have not scammed me? The dude's name is Robert Hetsler. Apparently "Dr." but I'm not buying that is legit. Thanks everyone.

@Cheryl Dopp - So you have joined BP today, just to comment on this? I'd encourage you to go beyond just the first posters comments and feel the anguish of all the investors that lost money. Then come back and offer some real value in your review. " trying to get in touch with Robert over a new transaction" .... seriously? Please read all 7 pages. I think everyone would agree that - NO this thread has not contributed to him being run out of business - His actions have led to him to BE out of business. Did investor funds pay for this? His $500 QI fee certainly did not ..... 06/22/17, Robert Hetsler paid $1 million for the 5,589-square-foot home at 4871 Scenic Marsh Court, off Heckscher Drive. Now in foreclosure! I am in the middle of my first 1031 exchange right now and my QI is Claudia Kiernan - IPX 1031 The fee is 1k plus $200 on the back end for the identified property. Your attorney will not be shocked by this rate. You will be in good hands with Claudia. Good luck on your next transaction.

Hi Robert and thank you for your response. To be clear, it is not my intent to hash this out via an online forum, however, this was my last attempt to contact you and/ or your company prior to engaging legal action. Thank you for responding. I don't do 1031 exchanges, it's not my line of work, thus the reason I hired and paid your company to perform the process. I called, at minimum, 8 times today to your main office line. I tried every single digit option available to reach someone, no answers. My friend in Jacksonville (who subsequently came to your Regus office) called from a 904 number. The call was answered. To me this indicates you/ your company was dodging my calls. Additionally, my attorney called this afternoon, left a message that he was interested in performing a 1031 for a shopping center transaction. Within 1 minute (I was still on the phone with him) his call was returned. Once we informed, (whom I guess was a sales agent) the gentleman what our situation was and that we have been trying to contact you/ your company all day, he said he would have to call us back. Check your phone logs, it was 5:46 EST. yet again, no reply After googling your "office addresses" each one is a Regus keyman office. The reality is, on many occasions, company can pay Regus a small fee so they can receive mail at the Regus office thus creating legitimacy of a business practice. This, combined with my friend going by your Jacksonville office, lack of return phone calls, avoiding text messages, and no email responses set off red flags that something suspicious was happening. Again, my naievity could have been in play, but this isn't what I do everyday and have trusted someone I don't know with $113,000. An additional google search by attorney uncovered the February 28th judgement of case number SC12-3727 where Hetsler Mediation and Valuation was prosecuted by the FL State Bar for unlawfully practicing law in the state of FL. Out of respect, I will not post the link here. Subsequently, around 7:52pm est I received a call from someone in your office stating that he would send me an email with proof that the wire went through and was accepted by my attorneys office. It's currently 10:26pm and I have not received an email. I verified its not in my junk folder either. The only email I received from you was at 12:47 this afternoon saying you personally called the bank and the funds would arrive within the hour. I emailed a response at 2:14 noting that the funds had not arrived. Again, no response from you or your team. (As noted above you have a smart phone and are connected electronically to your affairs). I get it, mistakes happen. I'm sure I made plenty today myself; however, I didn't make a mistake with $113,000 of someone else's money then refuse to contact them when there is concern... and it was not until I took to a fourm to discuss concerns and ask for council from others that I received a response from you. Again, I just want the money wired into the account and your company to perform the work in which it paid you to do. (Speaking of payment, my credit card was charged twice and it took me reaching out on multiple occasions to get a refund for the "accidental" charge). I would anticipate this matter to be rectified by 10am tomorrow. At that time I will gladly post on this thread how you kindly cleaned up this mess.

@Robert Hetsler This is a tough one I did not realize qualified intermediaries require no licensing and no over sight what so ever.. so I can see where folks could get freaked out... there is a huge amount of trust.. and we all know about that one nefarious individual who went on a rampage with clients money.. and if the intermediary I was working with had a Regius office I would be somewhat concerned as well.. but I am sure you guys will work it out. Lots of trust goes into this unlicensed and unregulated business.. from what I can see.. and your dead on your reputation is EVERYTHING and your correct to protect it...

I am seeing a made for TV movie or even mini series coming on. https://www.questia.com/newspaper/1G1-57505497/man...

@Tom Gimer Account Closed here is the episode I am talking about anyone considering a 1031 should watch it with interest https://www.cnbc.com/2014/03/31/young-lust-goes-bust.html And then pick your Q I VERY VERY Carefully.

@Bryan Feik, Whatever concludes this string, you are right about the control of funds issue. Unfortunately the Fed has had a similar feeling about the trustworthiness of the US public and so regulated the issue of constructive and actual receipt. So the rules are what they are. But that doesn't have to mean blind trust. There is a very easy answer and one that we've been employing for several years. And that is to use individual segregated dual signatory accounts. Many QIs still use pooled trust accounts. This is not a good idea. Those that segregate accounts still usually have them under the master QI account. This allows a better paper trail and some segregation from the actions of other investors but does nothing to protect you from a QI - honest and sloppy or dishonest and larcenous. A segregated account protects you from another clients divorce, bankruptcy or EPA superfund claim. Dual Signatory means the account is in your name. It is your account. But it takes both your signature and the signature of the QI to transfer money - You can't move funds without the cooperation of the QI. The QI can't move funds without the cooperation of you. That doesn't rise to constructive receipt so you are protected both financially and under the 1031 regs. These accounts are more expensive and time consuming for us as the QI to set up. Interest is not earned. But they're infinitely superior to avoid the potential for most bad things.

I wonder if the car exploded due to someone else not getting their funds.........

Qualified Intermediary Scam?

John P.

Investor · Vacaville, CA · Member since 2016 · 433 posts · 249 votes

9y

I am VERY glad to hear the money is ok. Just to clarify has the money been wired yet? I'll feel better for you knowing the money is at escrow and your replacement property closes!

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Kim Kieu

Seattle, WA · Member since 2015 · 5 posts · 1 vote

9y

Greetings to Everyone.

I did a 1031 Exchange with R. Hetsler et al. It went ok except for the delay of the outgoing wire from Hetsler's account to the Seller of the replacement property. The delay was by 4-5 days (which includes Sat and Sun). They were responsive but there is room for improvement. I emailed R. Hetsler and his assistant Crystal Gay tonight, verbatim, as below:

The good:

The information and video currently on the website and the auto generated emails regarding the exchange e.g. exchange rules, due dates, etc... are well written, thorough and informative.
The email from the QI showing "proof of funds" for the acquisition of replacement property(ies) after the proceeds from the initial sale are deposited into the QI's account - is also a very good move
Crystal Gay is friendly, professional, prompt and irreplaceable - she has excellent customer service skills.

Suggestions for Enhancement:

Add content to the website regarding requirements to be a QI (e.g. IRS application process, state license? local county or city license?, etc...)
Add a flow chart summarizing the Exchange Process. The existing narrative is good but a flow chart gives a good process summary.
Create a video and a flow chart detailing the anatomy and physiology of a wire: describe A-Z how an outgoing wire is requested and how funds get to the recipient's account. Have a knowledgeable bank official provide much of the content. Describe the internal controls processes in your organization and security measures in place at the financial institution that aim at protection and fraud & abuse prevention. Refer to the multitude of federal statutes and regulations that govern bank wires. Clarify what the usual delay is from and the length of delay clients should expect. If delay is for clients' protection and they are informed about it, it should make them feel reassured, not anxious.
Get a business license and escrow funding account bearing the word QI, e.g. "A1 Qualified Intermediary Services. Otherwise, people justifiably think funds are co-mingled with other businesses when their money is being deposited into a business account (e.g. Mediation and Valuation, Inc.) that does not have the word QI in it.
Elaborate and add transparency to the bond and/or insurance aspect of the business. The website says bonded and insured but the business is CPA and Mediation & Valuation, Inc., not Qualified Intermediary. Clients would naturally question if the bond and insurance cover QI activities? What can be presented to show that the bond and insurance do cover QI activities?
When a wire is initiated, send a copy of that outgoing wire request to both Seller and Buyer. That gives them a chance to confirm that the intended recipient info and dollar amount are correct. Follow up with the federal reference number when that is available to show the wire is trace-able.

If I think of anything else, I will add to the list above.

Kim Kieu

Satisfied Client

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Dave FosterBusiness Member

Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes

9y

@Kim Kieu, I'm glad that worked out for you. One thing that may help others who don't meander to this string would be for you to post a review on their BP profile. Personal references are the best way to nip the scamsters in the bud while not harming folks trying to do a good job but having a bad day or two.

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Mike Granville

Manorville, NY · Member since 2017 · 1 post · 1 vote

9y

I too have used Dr. Hetsler, qualified intermediator capital advisors and had almost the same bad experience. I thought I did a lot of research, but apparently not. There were no filed complaints against them on the BBB and I had read many great reviews. It started with bad emails that looked as if they were computer generated. So I attempted to contact the office by phone and email with no reply. Then, I contacted the Spanish language line and someone answered who stated to me that he would take over the case and if I had any future questions, then call him. I realized they charged me twice, on my credit card and when I sold the first property at closing. (They refunded one of the charges without any question.)

So a week before closing I had a question and again I could not get in touch with their office for a couple of days. Finally, I received an email from Dr Hetsler stating that his associate was out of the country and would look into my exchange. Then one day before closing I expected my money to be wired and they failed to do so. I attempted to contact them again and they told me that the Title Co hasn't sent them a signed copy of my closing statement. When I spoke to the title company, they said they tried to reach out to the Q.I. and had no luck as well. So I emailed them a signed copy of the closing statement and asked if there was anything else that needed to be completed. They said that I was all set, but when I contacted the Title co., they told me that the wire had not yet been received. (24 hrs before closing as stated) I then had to email the Q.I. some kind of authorization to release my funds. (Just a one line email authorizing Dr Hetsler to release my money) Then, when it came to an hour before closing the money was not wired. So I attempted to contact them yet again and I was happy they answered the phone, but it sounded as if she was on her cell and we got disconnected. (I was on a land line) I tried to call them back, but they didn't answer. In the end, they wired my money for closing, however my Title co. stated that they seemed very strange and unprofessional as well. I would never use this company or recommend it to anyone.

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Brandon Lowery

OP

Investor · Mooresville, NC · Member since 2017 · 29 posts · 22 votes

9y

their business model is very sketchy. They advertise having offices all over the country when in reality they are $500 a month desk sitting in a key man office.

They use subcontractors who work out of their house. The phone calls that come in to their offices been forward out to the cell phone‘s of those whom work at home.

As you stated, and the same thing happened to me, they bombard you with opportunities for storage unit investments.

So what happens, in my opinion, from a business model perspective is they use the 1031 as AN investment strategy to capitalize the storage facility business.

Is it illegal, no. Is it sketchy, absolutely.

If you have a moment, read through my ordeal. I started this thread. An absolute travesty. I even had a friend of mine who lives in Jacksonville Florida go by their “office” to figure out what was going on.

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John P.

Investor · Vacaville, CA · Member since 2016 · 433 posts · 249 votes

9y

I just have to wonder why anybody does a 1031 exchange with anybody other than the large players. Are these small operators cheaper? I think my last 1031 was about $1,000 charge if I recall. It was a major company that was a subsidiary of a national title company.

2 Reply

Max T.

Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes

9y

@Robert Hetsler hasn't responded in a long time.... I think that says something...

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Brandon Lowery

OP

Investor · Mooresville, NC · Member since 2017 · 29 posts · 22 votes

9y

Agreed. Sounds like he comes through in the end, but getting to the end is painful. I haven’t read anything to indicate he’s taken anyone’s money (I would be curious to hear from someone who tapped into his storage unit gig).

Could just be as simple as a poorly run business, bad customer service, bad repeatable process and procedures, culture, etc.

Thinking back when I was in the thick of my 1031 process and how frustrated I was with the lack of response, how or why we got to where we were, I certainly didn’t care.

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Account Closed

Investor · South Jordan, UT · Member since 2017 · 86 posts · 34 votes

9y

I know a handful of 1031 Exchange Facilitators and QIs. I've never known of any whom don't value their reputation and have strong customer service skills. Let me know if I can help in any way.

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Dave FosterBusiness Member

Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes

9y

@Account Closeds comment, it's interesting that the highest risk 1031 exchanges will come from the cheapest and most expensive QIs. So be careful looking at price alone. Those of us that have national presences are all very consistent in what we charge. You can just about bet that the biggest QIs in the country are all charging around $700 - $1000 for an exchange. We all have economies of scale that allow us to provide work at a cheaper rate. But we also value and pay for the back office production and up front consulting that makes or breaks your exchanges.

An Intermediary trying to go it on internet traffic alone without back office support and professional employees may be able to do your exchange cheaper but they've scrimped on exactly the wrong thing - service, while spending lavishly on the exact wrong thing - advertising. The opposite side of that is the sole practitioner (probably attorney) who charges outrageously expensive fees because they only do a handful a year and the wheel is reinvented with each exchange costing the client.

But all this being said, even with a larger firm, your exchange experience will only be as good as the representative assigned to you and their accessibility. The time sensitive nature of the 1031 and the nightmarish myriad of regs associated with it demand that you have timely experienced professional service.

So take me with a grain of salt but my advice to all - Don't go with the cheapest or the most expensive. Go with the most experienced and responsive. And you'll be fine. One horror story begets a dozen bogeymen. But the reality is that the 1031 exchange is a powerful and easy to use tool for the real estate investor wanting to maximize their returns.

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Account Closed

Investor · South Jordan, UT · Member since 2017 · 86 posts · 34 votes

9y

Thank you, @Dave Foster, for your response. We deal with some investors looking for qualified QIs. Looking forward to referring clients to you and your team to handle their 1031 exchanges.

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Matt K.

Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes

9y

Damn, I'd probably die of a heart attack if this happened to me during my 1031. The group I used were amazing and responded quickly, which was a life saver because I was new to this. There are also a few 1031 people on here who seem like they'd act in similar fashion with how quickly they respond to random questions....

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Dave FosterBusiness Member

Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes

9y

@Matt K., Handholding's in our contract :)

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Matt K.

Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes

9y

@Dave Foster You're like a 1031 Santa Claus, just appear out of nowhere and bring gifts of knowledge haha. Which is even more impressive, because you aren't always tagged in it.

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Chris Carson

Real Estate Agent · Jacksonville, FL · Member since 2015 · 102 posts · 65 votes

8y

A Robert Hetsler from Jacksonville, FL was found seriously burned with life threatening injuries last night. Not positive it's him but kind of a rare name. Not trying to gossip but if anyone has money tied up w/ him figured you would like to know. Link attached. https://www.news4jax.com/news/1-person-in-hospital-after-car-catches-on-fire

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Robert Rayford

Investor · Las Vegas. Jacksonville, Bay Area Ca, Nv, Ca, Fl · Member since 2015 · 511 posts · 220 votes

8y

Wow, I been reading threads here on BP for years and this is by far the most interesting.

1 Reply

Brandon Lowery

OP

Investor · Mooresville, NC · Member since 2017 · 29 posts · 22 votes

8y

wow. Did anyone find out if this was him?

2 Reply

Mark Rush

Austin, TX · Member since 2017 · 3 posts · 3 votes

8y

Robert Hetsler was seriously burned according to his staff, and is in serious condition.

I have a transaction that has yet to fund, and nobody answers emails or phone calls. I dwelt with Crystal and Aurtoro and the later was more professional. Before the accident this QC would not respond to any of the request from the closing attorneys and the whole experience has felt like this company may just walk off with your money. It feels that way presently and I will be contacting the FBI as Robert, Crystal and Autoro need to be in jail.

2 Reply

Brandon Lowery

OP

Investor · Mooresville, NC · Member since 2017 · 29 posts · 22 votes

8y

Sad about his accident. Regardless of their business practices, I would not wish harm on anyone.

Sorry to hear you're in a bind with these guys. i'm really surprised they're still in business.

curious, how did you find this thread? i'm wondering if google searches for these guys would somehow be linked to our stories.

3 Reply

Mark Rush

Austin, TX · Member since 2017 · 3 posts · 3 votes

8y

Google search of Robert Hetsler.

1 Reply

Matt K.

Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes

8y

Originally posted by @Mark Rush:

Robert Hetsler was seriously burned according to his staff, and is in serious condition.

I have a transaction that has yet to fund, and nobody answers emails or phone calls. I dwelt with Crystal and Aurtoro and the later was more professional. Before the accident this QC would not respond to any of the request from the closing attorneys and the whole experience has felt like this company may just walk off with your money. It feels that way presently and I will be contacting the FBI as Robert, Crystal and Autoro need to be in jail.

In jail for what exactly?

0 Reply

Mark Rush

Austin, TX · Member since 2017 · 3 posts · 3 votes

8y

It's still developing but they would go to jail for stealing exchange proceeds that happens when you keep money that does not belong to you. It's all still developing I'm sure there are many other clients that will have similar or worst experiences.

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Brandon Lowery

OP

Investor · Mooresville, NC · Member since 2017 · 29 posts · 22 votes

8y

Your money is where? At this point I wouldn’t bypass anyone in their office and go directly to the holding company. There was some guy that was halfway responsible who called me from their office. I can’t remember his name. I think he was referenced somewhere in this thread

1 Reply

Bryan Feik

Investor · Denver, CO · Member since 2017 · 36 posts · 33 votes

8y

@Edward Rusher

Any update on this situation? Sounds awful, Im very sorry your having to go through this!

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

8y

Originally posted by @Matt K.:

Originally posted by @Mark Rush:

Robert Hetsler was seriously burned according to his staff, and is in serious condition.

I have a transaction that has yet to fund, and nobody answers emails or phone calls. I dwelt with Crystal and Aurtoro and the later was more professional. Before the accident this QC would not respond to any of the request from the closing attorneys and the whole experience has felt like this company may just walk off with your money. It feels that way presently and I will be contacting the FBI as Robert, Crystal and Autoro need to be in jail.

In jail for what exactly?

there is an American Greed episode on a QI that went on a rampage and lost multi multi millions.. basically on his lifestyle it was a massive ponzi.. he got life in prison.

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Qualified Intermediary Scam?

Qualified Intermediary Scam?

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