Setting up a 1031 exchange can be a swift process, especially when you work with a qualified intermediary like us at Deferred.com. An exchange can be set up in just a few minutes, and Deferred has experience working with investors who are already at the closing table for their sale.

The speed at which we can set up a 1031 exchange largely depends on the complexity of your transaction and how quickly you can provide the necessary information and documentation. However, we are committed to facilitating the process as efficiently as possible to meet your needs.

To give you a clearer picture, let's walk through the typical steps involved in setting up a 1031 exchange and how we at Deferred.com can expedite the process:

1. Initial Consultation and Planning: The first step is to have a consultation with us to discuss your specific situation and goals. This is crucial for understanding the properties involved, the timeline, and any potential challenges. We can often schedule this consultation within a day or two of your initial contact.
2. Engagement and Documentation: Once you decide to proceed, we will provide you with an engagement agreement and request the necessary documentation. This includes details about the relinquished property, the anticipated sale date, and any potential replacement properties you have in mind. If you have these documents ready, this step can be completed very quickly.
3. Drafting the Exchange Agreement: We will draft the exchange agreement, which outlines the terms of the 1031 exchange. This agreement is crucial as it ensures compliance with IRS regulations. We can typically prepare this document within a day of receiving all necessary information.
4. Coordination with Closing Agents: We will coordinate with the closing agents involved in the sale of your relinquished property to ensure that the exchange proceeds are properly handled. This involves setting up the necessary escrow accounts and ensuring that the funds are transferred to us, your qualified intermediary, rather than directly to you. This step is often completed in parallel with the drafting of the exchange agreement.
5. Identification of Replacement Property: You have 45 days from the sale of your relinquished property to identify potential replacement properties. While this is a statutory requirement, we can assist you in understanding the identification rules and ensure that you meet this deadline.
6. Acquisition of Replacement Property: You have 180 days from the sale of your relinquished property to close on the replacement property. We will work with you and your closing agents to ensure that the funds are properly transferred and that the transaction is completed within this timeframe.

Example: Let's say you own a rental property that you plan to sell for $500,000. You contact us at Deferred.com on a Monday, and we schedule a consultation for Tuesday. During the consultation, we discuss your goals and gather the necessary information. By Wednesday, we send you the engagement agreement and request any additional documentation. You return the signed agreement and documents by Thursday. We draft the exchange agreement and coordinate with your closing agent by Friday. Your property sale is scheduled for the following Monday, and we ensure that the proceeds are transferred to us as your qualified intermediary. You then have 45 days to identify a replacement property and 180 days to complete the purchase.

By working with us at Deferred.com, you benefit from our “No Fee Exchange” service, which saves you money while ensuring a smooth and compliant 1031 exchange process. Our team is dedicated to providing efficient and reliable service, allowing you to focus on finding the right replacement property without worrying about the complexities of the exchange process.