Review of OREXCO Hawaii
In November, we sold a property in Las Vegas that had appreciated in price by 70%, resulting in a gain of $90,000. Pretty sweet!
After a quick consult with our CPA, our long term capital gains tax that we would have to pay would be $18,000. Enter into the picture, the strategy of a 1031 exchange, which allows investors to defer the tax on gains by purchasing something else of equal or greater value.
For this, we contacted Julie Tumbaga of OREXCO Hawaii. She was a guest speaker at a HIREI event, and not only was she knowledgeable and sharp, she was also beautiful and funny. She was an authority in the field of 1031 exchanges, easy to talk to, so Aunty contacted her, signed a few papers, and we were ready to rock.
Aunty did not get to work directly with Julie. Instead, a very nice gal named Tasha was the main contact, with occasional communications with William. They were very helpful and it seemed as though the 1031 exchange process would be easy peasy.
Sell, but let OREXCO know before it closes!
The first part of the exchange process for us was the sale of the Las Vegas property. Our listing realtor made sure that all of our contracts specified that the sale would be a 1031 exchange, and it was duly noted and recorded thus on our settlement statement. The sale of the Las Vegas property took a bit longer than anticipated, and when it was recorded and closed, communications to OREXCO were great, and our 1031 exchange file was now official. Escrow now held our funds.
Identify, or else….!
Next was to identify up to 3 properties that we intended to use toward the exchange. This had to be done within 45 days of the sale, period.
Aunty must admit to having very bad habits, one of the worst being procrastination. Another is not opening up attachments or asking enough questions if something is not understood.
Over a month had gone by before contacting OREXCO, and before Aunty realized it, the 45 day deadline was looming. Panic!!!
OREXCO knows what to do for 1031 exchanges. They are probably the best company in town for this. However, they don’t know what Aunty doesn’t know, and that was a bit of a problem.
One of the key forms to have is the “Identification Notice (Three Property Rule)”, early on. Aunty did not know that this form needed to be filled out and sent to OREXCO until a few days before the 45 day deadline. It was sent in response to Aunty’s email regarding several offers being submitted via our Vegas realtor for properties, and asking if I needed to send OREXCO the copies, addresses, offers. The response was a very cheery “There is no need to copy me on the offers. You will need to formally identify the possible replacement properties by your 45th day, which is 1/10/13. I have attached your identification notice for your convenience. Have a great day!”
Aunty mistakenly thought that just submitting offers that specified “subject to 1031 exchange” was sufficient, and did not open the attachment that was attached for Aunty’s convenience until a few days before the deadline. Duh! Aunty needs to learn to read better. Not making this deadline will render the exchange as failed, and your money in escrow will stay there for 6 months!
One day before the 45th day deadline, Aunty sent in a list of 3 properties which we had put in offers. An email from the OREXCO corporate office confirmed receipt almost immediately.
After a quick check on the status of those offer with Aunty’s realtor in Vegas, those 3 were nixed because they were already in contract with other buyers, and 3 more possible properties were found, and offers written. On the day of the 45th day deadline, a new list of 3 identified properties was emailed to OREXCO, with a note on the form “Please revoke any and all previous identification notices.”
What a relief!?
Or was it? Aunty did not receive an email from the OREXCO corporate office like before, but thought that could be the fact that they were already closed for the weekend.
Panic again – did they, or did they not get the updated list? Yikes!!
Several emails and a call back from Tasha gave instant relief – yes, the new list was received by the deadline, and the 1031 exchange was still valid and good to go!
Go, Martin, Go!
This gave Aunty’s top notch Vegas real estate agent the green light, and within 2 days of writing offers on the 3 newly identified properties, 2 responded with counter offers.
Martin went to see both properties to give us a better picture of the properties than those on the MLS. Both were pretty nifty from his description, and after some thinking, a counter to the counter of the larger of the 2 was made, and almost immediately accepted!!!
This identified property was put into escrow with the same title company that handled the sale of the first property, and scheduled to close within 2 weeks. It was smooth sailing after that, and we closed on the new property, funds went to the right people, paperwork was filed by the experts, and it is all good to go!
If you plan to do a 1031 exchange, use Julie Tumbaga’s OREXCO Hawaii. For $900 (plus $250 upon closing), we bought peace of mind because of the expertise of Julie’s company. Plus, we didn’t have to pay any tax on our capital gain – how cool is that!!! In the next few years, if the value of this new property goes up, we’ll probably do another 1031 exchange, and OREXCO will be our go-to intermediary, without a second thought.
Julie’s number is 808-524-6737, and her email is email@example.com.
Tell her that Aunty sent you – even though she won’t know who Aunty is, LOL!