1031 Exchanges-A Risk I Never Would Have Thought About

[haha]

Bloomberg.com: Exclusive

Best quote, from attorney for the CEO of one of the failed 1031 custodians who is accused in a civil suit of misappropriating funds:

"There were contracts, but there were no restrictions on what could be done with the money once it was obtained,'' Dzarnoski said. ``There's a spectrum between throwing money on a gaming table and investing in government securities. McGhan's use fell somewhere between those endpoints, and what's going to be determined in court is whether or not that's OK.''

Well heck, he didn't throw it on the crap tables, so he must be in the clear!

Ha

 

[tightasadrum]

It never crossed my mind to ask the attorney doing my 1031 Exchange where she was going to park the money before the second closing.

You can bet I'll address it next time.

Thanks, Ha

 

[tryan]

I used Allstates 1031 exchange as my facilitator. Then made sure the closing dates were only days - rather than weeks/months - apart. They also made sure I received the interest on the parked $$ (even though it was a short time).

All in all a good experience.

BUT the disclosures you sign are pretty daunting ... it is thier $$ for a short time. It's the only way to have legal exchange. They basically hold and exchange the properties.

 

[Texas Proud]

Since I used to work in the trust dept... I knew the people that did these...

You should use a trust company that is insured.. most banks have the necessary protections.. if you try and be cheap with your money, you can get burned..

BTW, most of the time they were cheap to do considering how much money can go through them...

 

[barbarus]

Sorry Ha. You were way ahead of me. I posted the same info.

There are many more ways to lose your money than to increase it. Whoda thought. She is in a miserable spot with, it appears, very little recourse.
Where it me, I'd have to stay away from anything sharp for the rest of my life.