1031 Exchange into DSTs: During your Exchange - Lifecycle of a DST Episode 2

Hello and welcome to Exchange Insights, your resource for 1031 intelligence and education. This is the second video in our three-part series called Life Cycle of a DST. My name is Tom Wall, 1031 expert and partner at Anchor1031. And today we're going to be going over what you should expect during your 1031 exchange transaction. Next up for our final video in the series will be what to expect after your 1031 exchange.

So as mentioned in the previous video, once we've had a series of conversations and taken part in an education leading up to the exchange, we start helping our clients build that portfolio. We introduce them to different sponsor groups and we educate them on who could potentially be a partner to complete their 1031 exchange. At Anchor1031, we aim to make the paperwork process for building that DST portfolio as smooth and painless as possible.

1031 investors will simply let us know which properties they want to invest in, how much they plan to allocate to each, and we will handle the logistics to prepare purchase documents for your signature. We'll be here to guide you through the entire 1031 process. In addition to the education that they provide on the DSTs, the sponsors, the mechanics of the exchange, they'll communicate with all of the parties involved with the transaction. So, we'll work with the exchangers legal team, their CPA, make sure everybody is on board and fully understands the investment risks involved and make sure that we're meeting the IRS requirements to make sure that you actually complete your 1031 successfully.

So, we'll interact on your behalf with the sponsors, broker dealers, qualified intermediaries, and all parties involved to facilitate a smooth and successful 1031 exchange.

So, once the paperwork process is completed, the paperwork will be then submitted to GreatPoint Capital, who's our broker dealer, and sent to the sponsor for review. Our team at Great Point will then review the paperwork, make sure all the tees are crossed and all the eyes are dotted. And once they review the purchase documents and all supporting documents, they'll send their approval over to the sponsor. The sponsor will then conduct their own compliance review. Make sure the paperwork's all in good order.

Now, once the sponsor receives their approval from GreatPoint, they'll then reach out to your qualified intermediary with a closing statement, fully executed purchase agreement, and they'll request funds to close your purchase. The qualified intermediary will then reach out to the investor, you, and ask if the information sent by the sponsor is accurate. If these documents are accurate, closing statement is correct, then you can sign off an approval allowing the qualified intermediary to send the funds over to the sponsor and get your purchase closed up.

So, your registered rep at Anchor1031 never touched the money—it goes directly from the qualified intermediary to the seller or the sponsor.

So, once this is all concluded, funds have been wired, congratulations, your investment is closed. This typically takes just about three to five business days on average. Once wire is received and you're closed up, the sponsor is going to send out a closing statement, fully executed purchase agreement, and you'll have access to a ledger from your qualified intermediary. It's going to show where the money came in from and where it went and all expenses involved along the way so that you can keep that for your records.

This process is going to be repeated for each DST in a 1031 exchange. So, we do our best to streamline that process and make it as easy as possible on you.

Now, as I said earlier, this typically takes an average of 3 to five business days. And once we have all the proper paperwork in, from the time it gets submitted to our broker dealer to the time where the qualified intermediary wires the funds, 3 to five business days on average. That's all for this video.

Next time, we'll be talking about what happens after you complete your exchange. My name is Tom Wall, partner at Anchor1031. Thanks so much for checking out Exchange Insights, your resource for 1031 intelligence and education. Sign up on our website anchor1031.com for a consultation if you'd like to discuss your particular situation. Thanks so much. Talk to you soon.