A Forward Exchange occurs when an exchanger closes on the sale of their "Relinquished Property" before they acquire their "Replacement Property ". In this case, only direct deeding to the buyer will take place. The proceeds from the sale of the exchanger’s Relinquished Property will be paid to RMEC and deposited in an FDIC insured institution. These proceeds are held as the net exchange value of the Relinquished Property. When the property or properties that the Exchanger wishes to acquire are ready to close, RMEC will take assignment of contract for the Replacement Property. Using the net exchange value, we will acquire the Replacement Property for the Exchanger through the closing company you select by joining into the transaction as the buyer. The Replacement Property will be deeded directly to the buyer. This completes a Forward Exchange, securing the right property at the right time while preserving the potential tax benefit.

The Exchanger must designate or identify the Replacement Property within 45 days from the closing of the Relinquished Property. Three properties may be identified without regard to their fair market value. In addition, there are two other identification options. These are the 200% rule, where the combined value of the Replacement Properties nominated does not exceed 200% of the value of the Relinquished Property, and the 95% rule, where the exchanger acquires at least 95% of the nominated properties. Receipt of the Replacement Property must occur within 180 days from the closing of the Relinquished Property. No extensions of these time limits are allowable.

RMEC is also capable of handling reverse exchanges whereby the Replacement Property is acquired prior to the transfer of the Relinquished Property. In this transaction, RMEC Properties LLC actually takes title to the Replacement Property and holds the property until the Relinquished Property is sold. Exchanger's funds are provided by the exchanger to acquire the Replacement Property. These funds are secured by a Note and Deed of Trust in favor of the Exchanger on the Replacement Property. Once the Relinquished Property has closed, the proceeds are paid to the taxpayer as reimbursement for the funds provided for the acquisition of the Replacement Property. The 45 day rule and 180 day rule (discussed under "Time Requirements") apply to reverse exchanges as well. Once the Relinquished Property has been closed, RMEC Properties LLC will convey the Replacement Property to the Exchanger,

Forward Exchange: $600.00
Reverse Exchange: $2,500.00
Improvement Exchange: $2,500.00

Fees above assume one Relinquished Property and one Replacement Property. Additional Replacement or Relinquished Properties are an additional $300.00 per property. A maximum of two wires or checks per month is allowable on the Improvement Exchange.

Nothing in this website should be construed as legal, tax, or investment advice. Individuals or companies considering a transaction of the kind described herein should consult their own legal, tax and investment advisor prior to initiating such a transaction. The application of Section 1031 to a particular transaction, or property, can only be determined after careful study of a taxpayer's particular facts and circumstances and analysis by his tax advisor.