All 1031's are not created equal !

Ever heard of Land America 1031 exchange company? If not, you should have !

Land America was approved by the IRS as a "qualified intermediary", an institution approved to facilitate real estate 1031 exchanges.

i'm an attorney and was personally involved in a transaction with them.  Think about having them holding your funds, calling to check on their status and receiving a 1-800 recording that the company had just filed for bankruptcy!

I  immediately phoned every realtor, broker and attorney I knew asking had they ever encountered this problem ?  Would you believe the vast majority simply stated not to worry these funds were in trust !

Wrong!  Long story short Land America 1031 exchange was running a giant ponzi scheme. Paying old exchanges with new money! Some of the investors had their entire life savings and retirement investments at stake.

The good news is we received from the bankruptcy court approximately 95 percent of our funds. However; it took over 3 years of litigation.

The ordeal taught me to draft my own iron clad 1031 agreements in the future. Make sure you have your funds earmarked and do not allow the the 1031 exchange company to "commingle " your funds.  

Always insist the institution holds your funds in an FDIC insured account(s).