Facts about 1031 Exchanges and Qualified Intermediaries

IRS Code section 1031 allows anyone to sell investment properties including raw land 100% tax-free, provided they purchase new properties.

1031 Exchanges require the use of a "middle man" called a Qualified Intermediary to process the transaction.

Anyone can become a Qualified Intermediary without any special degree, past experience, licensing or certification, or even being bonded.

Using one of many techniques, you may even be the Qualified Intermediary for your own exchanges, enabling you to maintain total control, keep all the interest income, and pay little or no fees - and the exchange will not be disallowed.

Accountants, realtors, attorneys, financial planners, mortgage brokers and any other professional or opportunity seekers can perform exchanges for their own clients or for others without the exchange being disallowed, while making thousands in exchange fees.

Over 50%* of all real estate investors, accountants, attorneys, and financial advisors have never heard of a 1031 Exchange or fully understand what they are or how they work! This creates a hot opportunity and a unique market niche!

Over 50%* of real estate investors with five or fewer investment properties do not have any professional financial advisor to steer them to this type of exchange, act as their Intermediary or give them advice on replacement properties.

A simple 1031 exchange can take as little as five to six hours of work to complete, yet can put $2,500 or more in your pocket. And you can complete the exchange by fax and mail - you don't even have to be present at the closing.

On the average, Qualified Intermediaries charge between $750 and $2,500 for a simple 1031 Exchange. Just one exchange a week can produce an additional income of up to $100,000 a year! It's a perfect part-time business that produces a full time income.

Many banks and other large financial institutions not only charge up to $2,000 for fees, but keep all the interest accumulated by escrow funds, adding tens of thousands of dollars to the cost. You can choose to do the same, or you can offer a better deal by refunding all interest and still make a substantial income!

Hundreds of thousands of exchanges take place every year.

More than 400,000 1031 exchanges took place in 2005, and this number is expected to possibly double over the coming years, fueled by retiring baby boomers and investors abandoning high-priced real estate areas and seeking higher and safe cash flows.

Qualified Intermediaries can create additional profit centers by offering to find replacement properties (including TICs and zero-cash-flow properties), and mortgages.

*Numbers provided courtesy of 1031 Exchange Group LLC