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Swap 'Til You Drop!

By Margaret Woda

Real Estate Agent with Long & Foster Real Estate, Inc.

February 03, 2009 03:12 PM

That advice comes from "inactive" ActiveRainer James Brennan, a 1031 Exchange facilitator I met through LinkedIn. As an ActiveRain pioneer who joined in 2006, James wrote a lot of good information about 1031 Exchanges during the next year, but he hasn't posted anything since September 2007. He would probably be very surprised to see our custom blog designs, outside blogs, and many other improvements.

Recently, I sent him a link to the information on my website about 1031 Exchanges and asked if it was up-to-date or needed revising to reflect today's laws on Exchanges. In his reply, he said that the information needed "more sizzle" and volunteered to provide some.

Of course, I jumped on that opportunity and invited him to be a Guest Blogger for "Focus on Crofton."

tax return - istockphoto I won't repeat every word here, for the sake of SEO, but please click on Tips for Crofton Investors on Using a 1031 Exchange to read his expert answers to these questions:

How can you use a 1031 exchange in this down real estate market?
What is a Section 1031 Exchange?
What is a Qualified Intermediary and Why Do You Need One?
What taxes do you defer with Section 1031?
Why do you suggest investors should keep exchanging?

If the idea of a 1031 Exchange scares you, take a few minutes to read James post, 1031 Exchange Basics - FAQ, here on ActiveRain. Then, for a little "more sizzle" check out the information he sent me, posted today on Focus On Crofton, and find out why he says "Most investors swap 'til they drop!"

The next time someone asks why you "waste so much time on social media" you can tell them it's a great way to meet experts like James Brennan. Thanks to our connection on LinkedIn, a lot of consumers and other real estate professionals have an opportunity today to learn more about 1031 Exchanges.

For more information you can contact James by email at jbrennan@1031esgroup.com or call him at (703)801–4178. Website: 1031ESGroup.com.

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Julie Hite

Guaranteed Home Mortgage Company, Inc. - West Bloomfield, MI

Wow, I hope you are friends! Seems like a nice guy and I am a bit confused about the beef. Social media downers are everywhere. They are selling reports about maximizing SEO without SM, but we know here that it works. So let them lie in their mud and get out when they are ready..

Feb 03, 2009 03:58 PM

Jesse Clifton

Jesse Clifton & Associates - Fairbanks, AK

I'll have to check out your blog Margaret. I know this social media stuff pays great rewards, but honestly I'm on overload trying to keep up with clients and invitations to a new site every day. Busy is good though, so I'm not complaining... even if it sounds like it. haha

Feb 03, 2009 05:15 PM

Bill Gassett

RE/MAX Executive Realty - Hopkinton, MA

Metrowest Massachusetts Real Estate

1031 exchanges are a tricky subject. Good work calling in the experts for the correct answers Margaret!

Feb 03, 2009 11:27 PM

Cynthia Tilghman, Realtor® Onslow County NC Home Specialist

Kingsbridge Realty, Inc - Hubert, NC

Hi Margaret,
I've worked with one 1031 exchange and my advice is make sure both clients have legal advice.

Feb 03, 2009 11:33 PM

Terry & Bonnie Westbrook

Westbrook Realty Broker-Owner - Grand Rapids, MI

Westbrook Realty - Grand Rapids Forest Hills MI Re

I have completed a few 1031's but recently I haven't had the occasion. Thanks for the reminder I might call a few investors.

Feb 04, 2009 12:35 AM

Margaret Woda

Long & Foster Real Estate, Inc. - Crofton, MD

Maryland Real Estate & Military Relocation

Terry - I'm in the same boat, and I welcomed this input from someone who deals with them every day.

Cynthia - Unless I'm mistaken, it doesn't affect the other party of the transaction in any way. Am I missing something here? James, if you're reading this, could you weigh in?

Bill - While I've done these, I welcome the expert advice and think it's worth noting that it all started with Link

Jesse - I hear yah! I'm not a frequent participant, but I try to check in a couple times a week for a minute or two. While I appreciate it's value, the bottom line is that it's all about doing business!

Julie - Thanks for commenting, although I'm not sure exactly what you're saying. LOL.

Feb 04, 2009 03:18 AM

Rebecca Levinson, Real Estate Marketing and Online Advertising Consultant

Real Skillz-Clear Marketing for Your Real Estate Vision - Lake Geneva, WI

Margaret- That is fantastic, having him as a guest blogger. Guest bloggers are a great way to build a more heavy contending content rich blog and engage readers.

Feb 04, 2009 03:49 AM

Cindy Jones

Integrity Real Estate Group - Woodbridge, VA

Pentagon, Fort Belvoir & Quantico Real Estate News

I've personally done three 1031 exchanges. I just finished one for a client who was selling property in CA and bought a property in VA. Once you figure out the rules it is a fairly easy process.

Feb 04, 2009 11:37 AM

Anonymous

James Brennan

Question: "Unless I'm mistaken, it doesn't affect the other party of the transaction in any way. "

Answer: There are a lot of misconceptions out there that an exchange has to involve a "deed swap" or find a buyer who wants to do a swap himself. All untrue. When a seller puts his property on the market he can decide "mid-stream" it is going to be involved in his or her own personal like-kind exchange. Prior to settlement about 50% of our clients add language to the purchase agreement that the sale will be part of a 1031 exchange. The NOTICE of assignment addendum in our files does have a place where the buyer attests that the seller is not "taking control of his or her proceeds". This substantiates the seller's case when saying to the IRS, "I complied with the safe harbor and gave my money to a qualified intermediary and did not put it in my own personal bank account along with my savings." Long-winded answer to your question, but the short version is the buyer is not impacted but kind of resembles a witness in the transaction saying "that guy didn't take a check away from settlement". Also the Seller's name at settlement should appear ES Group, Qualfied Intermediary for Jane Doe, not just Jane Doe. This again assures the use of the Safe Harbor under the regulations.

Feb 07, 2009 01:55 AM

James - Thank you for answering the question. In my Exchange transactions, it did not impact the other party in any way other than signing documents at settlement to assure the sellers' proceeds were being properly allocated, as you say. We have wording in our "standard clauses addendum" that simply informs the other party at the time of contract that this is or may be a 1031 exchange on the part of one party to the contract.

Feb 07, 2009 02:01 AM

Yes, and for local agents an addendum is on "ZipForms"

Feb 07, 2009 02:29 AM

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Swap 'Til You Drop!

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