ExStra is the only 1031 accommodator that is dedicated to reverse exchanges. Our firm is structured specifically to operate successfully without reliance on the yield from delayed exchange proceeds. Because we are dedicated to reverses, we cannot come under financial stress because of the interest rate climate, no matter how it may change. We have developed a number of security devices to ensure the timely return of assets held in a reverse exchange in virtually any situation.
Our team members have decades of 1031 experience and have collectively executed thousands of successful reverse exchanges. We have applied our expertise and experience to the creation of state-of-the-art reverse exchange processes that are unsurpassed in the industry in ways that add genuine value to our clients.
Although IRS Rev. Proc. 2000-37 provides the necessary guidance on the structure of safe harbor reverse exchanges, there is nothing formal that describes the various and detailed aspects of the execution of reverse exchanges. Ultimately, there is no authority on correct reverse exchange execution and potential Exchangors will be surprised by the resulting lack of consistency. Many Accommodators use outdated reverse exchange documents that do not reflect current best practices, IRS guidance and the results of various forms of litigation and court action. Many Accommodators, especially those charging very low fees, cut every possible corner to avoid cost and reduce the time expended. This will likely come back to haunt the Exchangor as many shortcuts can have a negative affect long after the conclusion of the exchange. Other Accommodators charge very high fees because they really do not want to perform reverses but will do them, at unreasonable expense to the Exchangor, if enough profit potential exists. This results in spending money needlessly for services provided by a reluctant Accommodator. Frequently, this type of Accommodator regards the Exchangor as a potential adversary and will force the Exchangor to spend an inordinate amount of time collecting information that serves only to reduce their perceived legal risk.
In stark contrast, we have invested heavily in reverse exchange processes that are carefully structured to bring value to clients. We ensure complete and timely exchange execution while masking the additional complexity. Based on the criteria listed below, we believe that our processes are superior to any others:
We recognized several years ago that reverse exchanges offer benefits to Exchangors that were seldom, if ever, promoted or explained in detail. Assessing the specifics of those benefits for a particular set of facts and circumstances is a critical part of determining an optimal exchange strategy. This is the ExStra approach. By contrast, far more often a QI will present the idea of a reverse to a client only as a last resort or if there is no way to manipulate circumstance so that a delayed exchange can be done. Many QIs have described reverse exchanges as “loss leaders” or as a “necessary evil”. These phrases may apply to the status of reverses relative to the QI’s business but have nothing to do with the optimal exchange strategy of a particular Exchangor. Why this aversion to reverses? It has to do with the profit motive.
As we have shown in the section on Optimization Criteria, in a reverse, the Exchangor is the beneficiary of its capital investments. In a delayed exchange, it is the QI that benefits from the Exchangor’s capital. We monetize our business on the basis of reverse exchange accommodation fees only and not on the earnings from accumulated cash exchange proceeds. ExStra thrives when we earn a fair fee and the Exchangor gets the intended benefit of their investment strategy for as long as possible. Therefore, our survival depends on having processes that help Exchangors identify an optimal strategy and execute it in a way that keeps risk and cost down. We have to be distinctively superior in our approach to reverse exchanges in order to survive.
We believe that if we provide the best processes and the most aggressive commitment to responsiveness, that we will thrive. We also believe that our commitment to approaching reverse exchange from the process standpoint allows us to control our cost better than any of our competitors. Therefore, we are committed to winning every reverse exchange that we encounter and have stated in our Fee Guarantee that we will always provide an equal or lower fee for a reverse exchange that is superior in terms of thoroughness, security and responsiveness to that of any other Accommodator in the country.
Our financial stability is based on more than simply a balance sheet: