Many 1031 Exchangers start their exchanges without knowing which pitfalls can trip them up
if they aren’t careful. So, what are the biggest pitfalls which experienced Exchangers avoid
avoid and which you can make yourself aware? Here are the two big ones.
Pitfall #1 Make sure your exchange funds are safe!
This may seem trite, but it really isn’t. The 1031 exchange industry is largely unregulated.
This means that just being in the 1031 exchange business is not necessarily indicative that a given firm
is competent to handle your exchange and more importantly, your exchange funds.
This is your hard earned money. That is why you owe it to yourself
To engage your firm as your facilitator, like IPX1031 Who meets the ethical standards
That only a Fortune 500 company can provide. IPX1031 is the 1031 Exchange leader
With both technical expertise and Managing the highest level of security for your funds.
Also, when it comes to funds safety of your funds, bigger is better.
IPX1031 has developed a reputation as the national Leader in Internal Revenue Code Section 1031
Qualified Intermediary services And provides industry leading security for exchange funds
Through its secure measures and procedural controls. That is not necessarily the case with every other QI or lawyer with a trust account.
Also please make sure your facilitator has done Hundreds of thousands of exchanges.
There is just no reason why any facilitator Needs to be learning the 1031 process with your transaction.
And here’s Pitfall #2 Start looking for Replacement Property absolutely as early as possible.
Probably the hardest thing to do in any exchange is to identify your candidate or target Replacement Properties
within your 45 day ID period. Especially if you are looking in a hot market
where there are more Buyers than Sellers. That’s why you should be looking well before your
exchange property is even closed. This gives you the extra time in case you need it to find and secure the perfect replacement property.
Also, make sure the broker helping you locate a new property has access to everything available on the market.
So, those are the two big 1031 exchange pitfalls. Beware of them and good luck.