Why ExStra?

Dedication

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.

Track record and Experience

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.

Our State-of-the-Art Processes

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 Many Accommodators use outdated reverse exchange documents that do not reflect current best practices, IRS guidance and the results of various forms of litigation and court action.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:

• Continual independent review Our exchange processes are regularly subjected to review by an independent 1031 exchange authority of the highest caliber. This review process results not only in full compliance with IRS regulations but also includes the dynamic body of new guidance coming from the IRS, the courts and other important authorities.
• A formal proposal with a fixed fee We provide each prospective Exchangor a detailed written proposal that describes the form of the exchange, the Exchangor’s relevant facts and circumstances, a detailed description of the exact strategy we are proposing, a description of the documents, roles and responsibilities and a detailed account of all the known costs associated with the exchange. We never add additional accommodation fees to an exchange once the formal proposal has been accepted.
• A comprehensive Standard of Care that ensures thoroughness For each exchange, consistent execution of a detailed process for collecting data, determining strategy, creating documents, forming LLCs, managing deadlines, transferring ownership, communicating results, etc. is critical to ensure that the desired result (deferral of tax) is achieved and that, in the unlikely event of an audit by the IRS, the chances of a successful challenge are minimized. Please contact us for a more detailed description of our Standard of Care.
• A Service Level Commitment that specifies and ensures responsiveness At each step, the Accommodator should respond aggressively and completely. At critical junctures, responsiveness should be measured in minutes and hours. Please contact us for a detailed description of the Service Level Commitment
• Execution Assurance At various steps in the process, steps can be taken to ensure the timely execution of the process. We have developed a series of innovative and unique security devices that eliminate risk of failure of the Accommodator.

We Optimize for the Exchangor

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 are Tenacious Competitors

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.

Financial Stability

Our financial stability is based on more than simply a balance sheet:

• We have structured our firm to operate successfully as a fee-based business and we have been consistently profitable since our inception. We do not rely on interest earned on delayed exchange deposits for the health of our business. Further, ExStra has both minimal, contemporary business overhead and access to significant additional capital on very short notice should the need arise.
• Our comprehensive set of state-of-the-art security devices ensures that all of our exchanges will conclude in a timely manner, meaning that there will never be entanglement as a result of financial stress and that each exchange will conclude as planned even if some catastrophic event makes some or all of our team unavailable.
• We carry a large Errors and Omissions insurance policy. Contact us for details of the policy.