Harvesting the Opportunities of a Strong COI Network

Your role as a financial advisor licensed to conduct business using securitized investments is one of the most important relationships a business property owner can have.  Because 1031 “like-kind” exchanges can be considered somewhat complex transactions and since they must be completed in accordance with highly defined regulations, they require the guidance of skilled professionals. 

In addition to your responsibilities as a financial advisor, other important professionals involved in a 1031 exchange transaction may include a Qualified Intermediary (QI), CPA, Attorney, and Realtor. By building and leveraging key relationships with individuals who will become members of your 'Center of Influence,' (COI), you exponentially increase the potential to grow your business. 

Each of these professionals has their own client base and when a DST 1031 exchange proves to be the right solution for a real estate owner who has a relationship with one of your COIs, they need YOU and your expertise to facilitate and complete the transaction!

Let’s take a brief look at each of their roles:

Qualified Intermediaries

As defined by the industry’s trade organization (Federation of Exchange Accommodators) a professional Qualified Intermediary facilitates 1031 like-kind exchanges by creating and providing the necessary documentation, and by holding, safeguarding and disbursing the exchange funds for qualifying like-kind replacement property.

CPAs

Certified Public Accountants generally play the lead tax advisory role to the exchanger/client during the exchange process. CPAs are considered the primary source of tax advice regarding the exchange and they are knowledgeable on the rules of IRC section 1031 as well as other letter or rulings. They also can be a good source in helping clients select a reputable Qualified Intermediary.  

Attorneys

Tax laws are constantly changing, and Attorneys who specialize in the areas of real estate provide valuable counsel in helping clients understand the qualifications for a 1031 exchange as well as their options. Attorneys with expertise in 1031 exchanges can also prove to be valuable partners in representing clients in front of the IRS in the rare event that a need occurs. 

Realtors

Experienced and knowledgeable real estate agents/brokers are the fourth important part of your COI. They often have long-standing and trusting relationships with their clients, they understand real estate valuations and they are often the first individuals sellers go to when considering the sale of a business property. 

As an advisor, you recognize how valuable your COIs can be in acquiring new clients and growing your practice. But often, connecting with these professionals and developing relationships can be challenging. By making 1031 exchanges and DSTs a core part of your business, you may find it much easier to build relationships with the well-respected and competent professionals that fill the Qualified Intermediary, CPA, Attorney, and Realtor roles.