Reverse 1031 Financing Solutions utilizes its proprietary access to portfolio loan program designs available through key individuals at a select group of National and Regional mortgage lending institutions. 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 and program to the specific needs and requirements of your transaction. On a best-efforts basis, RFS will facilitate acceptance and funding of your reverse exchange by the referred lending 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 after the Reverse Exchange or Improvement Exchange is completed. These mortgage loans are always guaranteed by the exchangor (client or clients), 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 stress attempting to give you 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 worked out with the Exchange Accommodator.

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 RFS 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