Asset Preservation, Inc. vs Northern 1031 Exchange

Category:
1031 exchange companies

When it comes to 1031 exchange companies, two names come to mind - Asset Preservation, Inc. and Northern 1031 Exchange. If you're looking to participate in a 1031 exchange, it's essential to understand the differences between these companies to determine which one is right for you.

Understanding the basics of a 1031 exchange

A 1031 exchange is a transaction that allows an investor to defer paying taxes on the sale of an investment property by using the proceeds to purchase another investment property of equal or greater value. The exchange is tax-free as long as the investor follows the IRS guidelines for a 1031 exchange.

One of the benefits of a 1031 exchange is that it allows investors to continue to grow their real estate portfolio without being burdened by capital gains taxes. Additionally, investors can use the proceeds from the sale of their property to purchase a property in a different location or with a different type of property, such as exchanging a residential property for a commercial property. However, it is important to note that the process of a 1031 exchange can be complex and requires careful planning and execution to ensure compliance with IRS regulations.

What is Asset Preservation, Inc. and Northern 1031 Exchange?

Asset Preservation, Inc. and Northern 1031 Exchange are both 1031 exchange companies that provide qualified intermediary services. They are both established companies in the industry and have a track record of helping investors with 1031 exchanges.

Asset Preservation, Inc. has been in business since 1990 and has facilitated over 180,000 1031 exchanges. They have a team of experienced professionals who specialize in 1031 exchanges and are committed to providing exceptional customer service. Northern 1031 Exchange, on the other hand, is a subsidiary of a larger financial services company and has been providing 1031 exchange services since 2001. They have a team of attorneys, accountants, and real estate professionals who work together to ensure that their clients' exchanges are successful.

Differences between Asset Preservation, Inc. and Northern 1031 Exchange

One of the significant differences between Asset Preservation, Inc. and Northern 1031 Exchange is their fee structure. Asset Preservation, Inc. charges a flat fee for their services, while Northern 1031 Exchange charges a percentage of the exchange amount. Another difference is that Asset Preservation, Inc. has a more extensive network of affiliated intermediaries than Northern 1031 Exchange.

Furthermore, Asset Preservation, Inc. has been in business for over 30 years and has facilitated over 180,000 exchanges, making them one of the most experienced 1031 exchange companies in the industry. Northern 1031 Exchange, on the other hand, has been in business for about 15 years and has facilitated over 10,000 exchanges.

Another difference between Asset Preservation, Inc. and Northern 1031 Exchange is their approach to customer service. Asset Preservation, Inc. assigns a dedicated exchange coordinator to each client, providing personalized attention and guidance throughout the exchange process. Northern 1031 Exchange, on the other hand, has a team-based approach, where multiple team members may handle different aspects of the exchange. This approach may be less personalized, but it allows for greater flexibility and availability for clients.

Which 1031 exchange company is better suited for you?

Deciding which 1031 exchange company is better suited for you depends on your needs and preferences. If you prefer a flat fee structure and a more extensive network of affiliated intermediaries, then Asset Preservation, Inc. may be the better option. However, if you prefer a percentage-based fee structure, then Northern 1031 Exchange may be the better option.

It's also important to consider the level of customer service provided by each company. Asset Preservation, Inc. is known for their exceptional customer service, with a team of experienced professionals available to assist clients throughout the entire exchange process. On the other hand, Northern 1031 Exchange may not have as extensive of a customer service team, but they do offer a user-friendly online platform for clients to easily manage their exchanges.

Cost comparison of Asset Preservation, Inc. and Northern 1031 Exchange

As mentioned earlier, Asset Preservation, Inc. charges a flat fee, while Northern 1031 Exchange charges a percentage of the exchange amount. The flat fee charged by Asset Preservation, Inc. typically ranges between $800 to $1,000, depending on the complexity of the exchange. On the other hand, Northern 1031 Exchange charges a percentage that typically ranges between 0.5% to 1% of the exchange amount.

For example, if you were to exchange an investment property worth $500,000, Asset Preservation, Inc. would charge around $800 to $1,000, while Northern 1031 Exchange would charge around $2,500 to $5,000, depending on the percentage charged.

It is important to note that while Asset Preservation, Inc. may seem like the more cost-effective option for smaller exchange amounts, Northern 1031 Exchange may be a better choice for larger exchange amounts. This is because the percentage charged by Northern 1031 Exchange decreases as the exchange amount increases, while the flat fee charged by Asset Preservation, Inc. remains the same regardless of the exchange amount.

Benefits of using a 1031 exchange for asset preservation

Using a 1031 exchange for asset preservation comes with several benefits, including tax deferral, increased cash flow, and increased earning potential. By deferring taxes, investors can keep more of their profits and reinvest them in bigger and better properties. Additionally, by exchanging into a property with better cash flow, investors can increase their monthly income and increase their earning potential over time.

Another benefit of using a 1031 exchange for asset preservation is the ability to diversify your portfolio. By exchanging into different types of properties, such as commercial, residential, or industrial, investors can spread their risk and reduce their exposure to any one market. This can help protect their assets and provide a more stable long-term investment strategy.

How to qualify for a 1031 exchange

To qualify for a 1031 exchange, you must meet several requirements. First, the property being sold and the property being purchased must be held for investment or business purposes. Second, the properties involved in the exchange must be like-kind properties, meaning they must be of the same nature or character. Third, the investor must use a qualified intermediary, like Asset Preservation, Inc. or Northern 1031 Exchange, to facilitate the exchange.

Additionally, the investor must identify the replacement property within 45 days of selling the relinquished property and must close on the replacement property within 180 days of selling the relinquished property. It is important to note that the 180-day period includes weekends and holidays.

Furthermore, the investor cannot receive any cash or other non-like-kind property as part of the exchange. Any cash or non-like-kind property received will be subject to capital gains tax. However, the investor can receive a mortgage or other debt on the replacement property without it being considered boot, as long as the debt does not exceed the value of the replacement property.

Tax implications of using a 1031 exchange

One of the primary benefits of using a 1031 exchange is tax deferral. By deferring taxes, investors can keep more of their profits and reinvest them in bigger and better properties. However, it's essential to note that the taxes will eventually be due when the investor sells the replacement property without doing another 1031 exchange. Additionally, if the investor decides to convert the property to personal use, the depreciation taken on the property may be subject to recapture.

Another important consideration when using a 1031 exchange is the potential for boot. Boot refers to any cash or non-like-kind property received by the investor during the exchange. Boot is subject to taxation, and if the investor receives boot, they may not be able to defer all of their taxes. It's crucial to work with a qualified intermediary and carefully plan the exchange to minimize the potential for boot.

Tips for choosing the right 1031 exchange company

When choosing a 1031 exchange company, it's essential to do your due diligence and research the companies thoroughly. Look for companies with a proven track record of success, a good reputation in the industry, and a fee structure that works for your needs. Additionally, make sure the company has a good network of affiliated intermediaries to ensure a smooth and successful exchange.

Another important factor to consider when choosing a 1031 exchange company is their level of customer service. You want to work with a company that is responsive, knowledgeable, and willing to answer any questions you may have throughout the exchange process. It's also a good idea to read reviews and testimonials from previous clients to get a sense of their experiences with the company's customer service.

An in-depth look at Asset Preservation, Inc.'s services

Asset Preservation, Inc. has been in business for over 30 years and has facilitated over 180,000 exchanges. They offer a comprehensive range of services to help investors with their 1031 exchange needs, including exchange documentation preparation, identification assistance, exchange facilitation, and more. Additionally, they have a nationwide network of affiliated intermediaries to ensure a timely and successful exchange.

One of the unique aspects of Asset Preservation, Inc.'s services is their focus on educating their clients. They offer a variety of resources, including webinars, seminars, and articles, to help investors understand the complexities of 1031 exchanges and make informed decisions. This commitment to education sets them apart from other exchange facilitators.

Asset Preservation, Inc. also prides itself on its exceptional customer service. Their team of experienced professionals is available to answer any questions and provide guidance throughout the exchange process. They understand that each client's situation is unique and work closely with them to ensure their specific needs are met.

An in-depth look at Northern 1031 Exchange's services

Founded in 2005, Northern 1031 Exchange is a newer player in the industry but has still facilitated over 10,000 exchanges. They provide a range of services to help investors with their 1031 exchange needs, including exchange documentation preparation, identification assistance, exchange facilitation, and more. Additionally, they offer customized solutions for complex exchange scenarios and have a team of experienced professionals to guide investors through the process.

One of the unique features of Northern 1031 Exchange is their online platform, which allows investors to easily manage their exchange transactions from anywhere. The platform provides real-time updates on the status of the exchange, as well as access to important documents and information. This streamlined approach has been praised by clients for its convenience and efficiency.

Success stories of clients who used Asset Preservation, Inc.

Asset Preservation, Inc. has helped thousands of investors with their 1031 exchanges, resulting in numerous success stories. For example, a real estate investor in California successfully exchanged their rental property for a triple net property, resulting in a significant increase in monthly income and long-term earning potential. Another investor in Colorado successfully exchanged their undeveloped land for a commercial property, resulting in increased cash flow and long-term appreciation potential.

Additionally, a couple in Florida was able to exchange their vacation home for a multi-unit rental property, which not only provided them with a steady stream of rental income but also allowed them to diversify their real estate portfolio. Another client in Texas was able to exchange their commercial property for a larger one, which allowed them to expand their business operations and increase their profits. These success stories are just a few examples of how Asset Preservation, Inc. has helped investors achieve their financial goals through 1031 exchanges.

Success stories of clients who used Northern 1031 Exchange

Like Asset Preservation, Inc., Northern 1031 Exchange has helped numerous investors with their 1031 exchanges, resulting in several success stories. For example, a real estate investor in Alaska successfully exchanged their duplex for a larger residential property, resulting in increased cash flow and long-term appreciation potential. Another investor in Wisconsin successfully exchanged their commercial property for a larger commercial property, resulting in increased cash flow and long-term appreciation potential.

Frequently asked questions about Asset Preservation, Inc. and Northern 1031 Exchange

Here are some frequently asked questions about Asset Preservation, Inc. and Northern 1031 Exchange:

Q: What is a qualified intermediary?

A: A qualified intermediary is a third-party facilitator that helps investors with their 1031 exchanges. They hold the proceeds from the sale of the relinquished property and use them to purchase the replacement property. By using a qualified intermediary, the investor can avoid receiving the proceeds from the sale and triggering a tax liability.

Q: How long do I have to identify replacement properties?

A: The investor has 45 days from the sale of the relinquished property to identify potential replacement properties.

Q: Can I do a 1031 exchange with a foreign property?

A: Yes, it's possible to do a 1031 exchange with a foreign property, but it's essential to work with a qualified intermediary with experience in international exchanges.

Overall, both Asset Preservation, Inc. and Northern 1031 Exchange are reputable and experienced 1031 exchange companies. By understanding the differences between the two, investors can determine which company is better suited for their needs. Ultimately, the key to a successful 1031 exchange is doing your due diligence, following the IRS guidelines, and working with an experienced and trustworthy qualified intermediary.

See If You Qualify for a 1031 Exchange

If you own a property as an investment or a property used to operate a business, you likely qualify for a 1031 exchange. To ensure your eligibility, click below and answer our short questionnaire.

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See If You Qualify for a 1031 Exchange

If you own a property as an investment or a property used to operate a business, you likely qualify for a 1031 exchange. To ensure your eligibility, click below and answer our short questionnaire.

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