The Triple A+ Golden Rule
We have a deep understanding of how to best utilize the advantages and approach a successful 1031 exchange, in fact 75% of our transactions involve a 1031 exchange.
This has made it extremely important for LAAA to become experts at the process to ensure the best results for our clients.
Our Best Kept Secret
In doing so we developed our basis for the leading facilitator in success: Find your buyer before becoming a buyer!
2 Reasons Why:
You need to sell your property at the highest price possible in order to maximize your equity for your exchange and to guarantee top of the market pricing, we need time to fully market and expose your property. Only through a full marketing campaign, which creates competition and an auction-like environment, can we guarantee that we did not leave a dollar on the table when selling your building.
You want to be the most desirable exchange buyer in order to get access to the best deals. Think about it from the seller’s perspective: if you write an offer on a “perfect” exchange property before you have found a buyer for your own building, you are not a desirable or probable buyer, since your offer will be contingent on selling your building first.
The moment that our team begins our marketing campaign for your current building, we will begin to show you available exchange properties (both on-market and off-market) weekly and sometimes daily.
The purpose of this is to familiarize you with the properties that are out there so that you can become an expert on what is out there and what you want. By the time we find the best buyer for your current property, we will be very aware of the market in which you want to buy, and we can start writing offers for properties that make sense.
Furthermore, once we find your buyer, we can use THEIR escrow deposit on the property you are selling to use as your escrow deposit for your exchange property that you are purchasing. This makes it so the 1031 exchange process has 100% no “out of pocket” costs.
The #1 worry of our clientele is "What if I sell my building first and then cannot find my exchange property in time? I do not want to pay taxes!"
The truth is we have time! The standard marketing time is 2-4 weeks. The standard escrow on selling your current property is 60-90 days, and we are showing you properties every week from the moment we start marketing.
Then, if somehow we have not found you a property in that time so far, you have 6 months to close escrow on your exchange property once your current property closes escrow (although we never need that 6 months). The market is extremely fluid with new listings and closings each and every day. Therefore, it is important for our clients to be patient in finding the correct property for them.
An additional benefit of being patient is that you do not have to overpay for any property. We will constantly be writing offers on desirable exchange properties at prices that make sense for you, not at prices that the sellers want you to pay.
With our 1031 exchange process, you will have more time than you will ever need, which allows you to be patient and find the correct property for you and your family and at the best price.
Build in Safety Nets
Although we have almost never used them, every good plan needs a backup plan. Our #1 Safety Net = Extensions to escrow on the sale of your current property
Remember, the 1031 exchange “clock” does not start ticking until you close escrow on your current property. Therefore – we can delay that clock from even starting by building in seller options to extend escrow. Usually, we will have 2 or 3, 30-day extensions to escrow built into the contract with the buyer for your current building. This means that we can make escrow pretty much as long as we want until we find your exchange property.
During those extensions, our team will be extremely aggressive in showing you every exchange property out there so that we can find your exchange property before we close escrow on your current property.
This safety net is one of the reasons why our team has never had a client pay taxes in a 1031 exchange, and truthfully, we have never come close. But remember this is a backup plan.
Our #1 Goal - Close escrow on your current property and exchange property in the same week, or at a bare minimum, the same month.
▪ The best deals go to the best buyers.
If you find a buyer for your building first, you now become the MOST desirable type of buyer since you are the most likely to close escrow successfully.
▪ Desirable buyers get the best deals.
You will also get much easier access to the off-market deals that generally sell for cheaper prices.
This is why LAAA is extremely proactive for our exchange clients. Our goal is not to just beat the 1031 exchange timelines, but our goal to close your current property and your exchange property in the same week!