Two Key Players You Need In Every 1031 Exchange

There is no arguing that a 1031 exchange can be the fastest way for an investor to build up his or her real estate portfolio. The tax-savings on capital gains means more dollars to invest in bigger and better properties – properties that have the potential to generate even more income down the road.

However, anyone considering a 1031 exchange must also consider adding two professional advisors to his or her team. By doing so, the investor can greatly streamline the exchange process and ensure that compliance with stringent exchange rules are met throughout the process.

An Exchange-Experienced Real Estate Agent

Sure, any real estate professional can tell you that he or she can help you find a suitable replacement property. And maybe they can. But what an agent who has no expertise with 1031 exchanges can’t do is help you set up an appropriate structure for the exchange or ensure that the “like-kind” requirement is met.

While loyalty to your personal agent is nice, when the time arrives to move into the sophisticated world of exchanges, you really do need to find an experienced agent who has successfully conducted many exchanges in the past.

An Experienced Exchange Professional

This is non-negotiable, too. The exchange process can be complicated and confusing and the smallest error can negate the tax-deferred nature of the entire transaction. Before you begin any exchange, be sure to find and retain appropriate professional advice to guide you through the process.

Usually, finding a highly-experienced qualified intermediary – a role you will likely need anyway – is your best bet to ensure the validity of your exchange. A good QI will guide you through the process, make sure all deadlines are met and ensure no missteps are taken that will jeopardize the exchange.

To learn more about 1031 exchanges or our qualified intermediary and replacement property locator services, please visit our website.