I am often asked about the safety of your money during the exchange so I always address it from the beginning. In addition to the below, I have hundreds or even thousands of references over the past 12 years of attorneys, CPA’s, real estate investors (both commercial and residential), realtors, title companies etc… that I can provide you as references upon requests. Obviously for their privacy, I do not include their names and number here on the website but I will be more than happy to provide as many samplings as you have time to call. Having done this for many years, I understand some hesitancy with handling this through someone you have never met but the reality is that is how all Qualified Intermediary’s work as most of my clients I have never met in person, which is why we are able to keep costs so low in this new era of technology.
Many states now have requirements that Qualified Intermediaries carry both Errors & Omissions Insurance and a Fidelity Bond, which we do carry. Additionally, some state regulations require a qualified intermediary to be either a licensed CPA or a licensed Attorney and I am a licensed CPA. Further, some states now require the exchange company to disclose anytime ownership change because of all the fraud that has gone on in the industry. I can tell you we operate under the name Hetsler Mediation & Valuation, Inc., d/b/a Qualified Intermediary Capital Advisors and have been operating under the same corporate name for my entire career and the only two owners have always and will always be my Wife and I. This can be verified by clicking on the Florida Corporation Website, as we are completely transparent and always have been. Finally, many states require the qualified intermediary to the 1031 Exchange to adhere to the “reasonably prudent investment” standard which does allow Qualified Intermediaries to invest the money while holding it. This puts your money at risk as there are too many factors that could affect your investment outside of anyone’s control. For this reason, we never put our clients’ money into anything other than a savings account with a large banking institution such that the principal is never put at risk. This is why we are one of the few Qualified Intermediary Companies still operating, without issue, after the recession. Countless Qualified Intermediary companies misused their clients funds or invested them unwisely and ended up filing bankruptcy which resulted in many clients losing all of their exchange money. Most importantly, no employees, other than my Wife and I of 14 years (first and only marriage for both of us) are the only two individuals with access to the Qualified Intermediary Accounts and the only two that can effectuate a transfer of the funds out of the account. The reality is the fidelity bonds only exist to protect the employer from employees misappropriating funds and in our case no employees have any access to misappropriate funds under any circumstances. Click here for a definition of a fidelity bond which anyone can secure for a few thousand dollars a year.
So the question you have to ask yourself is do you trust your money with a large company with many employees having control over your funds or a small boutique firm where only the owners have control over your funds. To me the answer is simple, less people having control over your money means less risk.
In short, yes your money is safe with Hetsler Mediation & Valuation, Inc., which is why the IRS highly recommends using a Licensed CPA or Licensed attorney as opposed to simple “1031 companies” that have to secure bonds to operate and then taunt them around to secure your business when the reality is that many of those companies, unlike me, simply folded up during the recession after misappropriating funds as there was no personal accountability like there is when you hold a state license to practice in your field. By hiring a licensed CPA or licensed Attorney, you have the additional layer of protection in that their license is on the line and any complaints or inquires made against them, for any reason, is always public information. My malpractice insurance carrier and CPA licensing folks direct phone numbers are below and you can call and verify that I have never had a malpractice claim nor have I had a complaint against my CPA license since being licensed more than 12 years ago. I assure you had I misappropriated even one penny of someone’s money there would be complaints against my malpractice and CPA licensing folks. Also, I am a Florida licensed real estate agent and hold several national designations (see the about us page below) all of which conduct background checks and all of which I am an active and respective member of with never one complaint filed against me with those national organizations. Also, you can always look me up on LinkedIn to see my background and recommendations. Please invite me to connect so you can see my full profile and positive feedback from all around the country. Simply mention wanting to connect as you are considering a 1031 exchange and I will accept the invitation without hesitancy.
Further, once you retain me, I always provide my personal cell phone number so I am available 24/7 to you as I know how important it is for you to be able to reach me and feel comfortable.
Finally, I am personally an avid real estate investor owning many residential rental properties as well several commercial properties. Further evidence of my willingness to let you see how open I am about my personal activities, here are links to just some of the commercial properties that I am the personal owner of and have owned for many years.
There are certainly other properties but this gives you a feel for some of my personal investments and how much they mean to me. I treat your personal investments, when doing a 1031 the same. Additionally, having years of experience as an real estate investor myself, combined with a law and accounting degree with advanced financial training at Harvard University, I am able to help you find and locate replacement property across all fifty states through my network of contacts should you need any assistance on that end.
Below is my malpractice agent and you can call him to verify there has never been a claim made against me.
James M. Frazier CPCU
Primus Assurance Group
3900 E. Mexico Ave. Suite 700
Denver, CO 80210
Also, and most importantly, remember to call or click the link to the the Virginia Board of CPAs (Verification of Good Standing), as they will verify there has never been a claim or complaint made against me and I assure you there would be had I ever misappropriate any funds that were not mine. Their direct number to call them is (804) 367-8505.
I hope this helps put your mind at ease as to why my company is the right qualified intermediary to hire when undergoing a 1031 exchange as I certainly have more education, credentials and licenses than most any other principal at any other 1031 exchange company providing Qualified Intermediary services. Please email me at Robert@qualifiedintermediary.