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    Post: My 1031 Exchange Almost Cost Me $6 million; Donít Let it Hap

    Posted by Peter Wunsch on 11/20/08


    Amid all the financial turmoil of the recent months, you may
    have missed a front page story in the Wall Street Journal
    about the scandal surrounding Vesta Strategies, one of
    several Section 1031 Qualified Intermediaries that has
    recently gone bust. In Vestaís case, it has managed to tie
    up more than $100 million of their clientís money. I know
    the heartache of working with Vesta first-hand: in early
    2007 I almost lost $6 million by trusting them with my 1031
    exchange.

    A qualified intermediary (in case you donít know) is a
    company that is licensed to perform 1031 exchanges. As a
    third-party that holds onto your money during the 180 days
    of the 1031 exchange process, they have COMPLETE DISCRETION
    how to use this money, subject only to the agreement you
    sign with them. For Vesta, it seems this meant unsound
    investments.

    The case of Vesta Strategies is not an isolated incident.
    To capture all of the 1031 abuse that happens, Iíve started
    a blog at 1031Vigilante.com where you can read about the
    latest 1031 abuse and the unregulated nature of Qualified
    Intermediaries. I sincerely hope you are never unfortunate
    enough to discover the heartache of an experience like my
    mine. But my story does have a happy ending, as well as a
    new beginning.

    Iíve also been working on my personal brand of revenge:
    Starting a 1031 exchange company that puts investors first;
    that will protect the investorís money as if it were their
    own. Launching this month, RockSolid 1031 goes beyond
    current regulations (or lack thereof) to ensure the security
    of your money. We commit to depositing funds only in
    money-market accounts that invest in government-backed
    securities. We have built RockSolid to facilitate the
    simplest 1031 exchanges possible. With unparalleled
    transparency and service throughout the entire process,
    RockSolid is a qualified intermediary created by real estate
    investors to meet the specific needs of real estate
    investors and their advisors.

    1031 abuse is a disturbing trend that all real estate
    investors should be aware of. Staying alert to deception in
    the market is our best chance to avoid becoming a victim.
    The next time you consider working with a Qualified
    Intermediary, please take the effort to find out where your
    money is really going. And before you give put your money at
    risk, make sure you are working with a company that deserves
    your trust.

    Thank You,

    Peter Wunsch
    Chairman, RockSolid 1031
    646-695-4700

    RockSolid 1031

    Posts on this thread, including this one
  • My 1031 Exchange Almost Cost Me $6 million; Donít Let it Hap, 11/20/08, by Peter Wunsch.


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