Reverse 1031 Financing Solutions utilizes proprietary access to portfolio loan designs available through key individuals at a select group of Regional or State specific mortgage lenders. Whether you are exchanging into a Residential investment property or a Commercial investment property, acting as a specialized, fee-based consultant we match up a lender who is familiar with and authorized to finance the specific needs and requirements of your 1031 exchange transaction. On a best-efforts basis, RFS will facilitate a suitable design, acceptance and funding for your Safe Harbor Reverse Exchange by the referred lender or institution.

Every 1031 exchange is a unique Real Estate transaction. For this reason we request the details of your transaction before we begin the search for financing. Foremost is an estimate of the sales price and existing mortgage balance of your relinquished property, and the resultant proceeds you wish to invest in the Replacement property. We note that in order to avoid taxable “boot”, the amount of financing currently existing on your Relinquished property must be carried forward to the Replacement property as new, permanent financing (or replaced with money from outside of the transaction). Because the Safe Harbor provisions of Revenue Procedure 2000-37 are very specific, we suggest that you utilize the services of an Exchange Accommodator as early in the process as possible.

In a Reverse Exchange, the funds for buying the Replacement property are not immediately available because the Relinquished property has not yet been sold. This often means the financing has to represent as high a percentage of the purchase price as possible. We have available several proven financing approaches, some originating from the commercial lending field and others courtesy of the residential lending field. The most significant of these is the ability to use equity in another of your properties as either collateral, or as cash via an equity line of credit, to help achieve 90% to 100% financing on the replacement property. Of course, as with any mortgage financing, bringing a down payment of 20% to 25% from any source can make the process easier and helps you get the best rates.

A secondary objective is to design and implement a custom financing package that if needed, can remain in place as a 1st lien mortgage after the Reverse Exchange or Improvement Exchange is completed. These mortgage loans are always guaranteed by the borrower (exchangor), and secured by the Replacement property. Because the Exchange Accommodation Titleholder (ACT) is usually set up to hold the property title utilizing an LLC, we suggest obtaining the option of keeping the LLC in place after the exchange is completed. Because maintaining title of the Replacement property within an LLC is a popular liability-reducing strategy for investors, this is an important decision to make early so that it can be proposed to the Lender and confirmed with your Exchange Accommodator and Tax Advisor.

Efficiency, flexibility and speed are desirable characteristics that RFS brings to the Reverse Exchange customer. This service extends to the entire financing transaction, where we often communicate and coordinate with the Title and Settlement professionals, real estate agents, property appraiser, insurance carriers, condo or HOA management, CPA’s, lawyers and other agents, personnel within the lending organizations, and the staff at your Exchange Accommodator.

To see how easily and thoroughly Reverse 1031 Financing Solutions can take care of your needs, please visit the “Contact Us” page of this website, or simply call or email directly to Frank Haentschke.

Email: frankh@reverse1031financing.com
Phone: (301) 979-9881 Mobile: (240) 423-9887