Recommend inexpensive but good 1031 exchange company?

Question

Planning on doing our first 1031 exchange.  Can anyone recommend an inexpensive company that will do it correctly?  We are in CT, but I think that the company can be anywhere in the country.  It's a very simple exchange, in that we own the building outright, aren't doing any seller financing, and the building that we would purchase is more than the profit that we would make on the building, including depreciation recapture.

Tilley Duthie · Answer

I recommend http://e1031xchange.com/  Only a $495 flat exchange fee. Great customer service!

Dave Foster · Answer

@Hai Loc, Any cash proceeds from the exchange have to be used in the purchase of new real estate.  So holding them as reserves won't work.  Unless you're willing to pay tax on that $100K.  You could take the money and do a partial exchange.  You would pay the tax on the $100K boot but shelter whatever profit was left in the 1031.  Another option is to use all of the cash in the purchase but after the fact put a LOC for the $100K on the property.  A refi after the fact is perfectly fine.

Richard Sherman · Answer

@Dave Foster You accounting types need some fun in your lives!  ahaha

Tony Kim · Answer

+1 on the @Dave Foster recommendation. I did a lot of shopping around for my exchange and ultimately decided that Dave Foster's company was the one to go with. I'm in escrow for a new property right now and it's been great.

Wayne Brooks · Answer

@Karen F. I’d recommend @Dave Foster, and yes you’re right, they don’t need to be local. QI fees are typically $800-$1000 I believe, which I think is quite cheap for their knowledge and experience.

You mentioned the replacement property will be “more than your profit and depreciation recapture”......realize that your “profit” has no bearing on the purchase price requirements for your replacement property....the replacement property price must be Equal to or greater than the Sales Price (less actual sales transaction costs) of the property you are selling, in order to defer all taxes.

Hai Loc · Answer

Dave

If you sell your property for $1 million. your net at closing after debts is $500,000..  Can you buy a property for $1.2M with 30% down using a total of $400,000 at closing and keep the remaining $100,000 in the bank as a reserve?  Or do I need to use the whole $500,000 onto the next property?

Dave Foster · Answer

@Richard Sherman, not sure how I feel about you thinking of me and "weird" in the same sentence.  But sounds fun.  Count me in!

Richard Sherman · Answer

I am going to have to hit up @Dave Foster on my next one!  I have been using the exchange dept of the title company and they have been fine...but seem to be somewhat reactive and not great at some weird scenarios I like to get myself into..haha

Dave Foster · Answer

@Karen F., You'll find a fairly close range of fees for a national footprint intermediary and it shouldn't break your bank.  It sounds like you've got the key things nailed.  Like @Wayne Brooks  said you don't need to focus on your adjusted cost basis and the unrecaptured depreciation.  As long as you are purchasing at least as much as you sell then you'll have no recognition of gain.

Recommend inexpensive but good 1031 exchange company?

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