1031 Mechanics

While each transaction may vary, the basic A Troika Consortium, Inc. exchange usually proceeds as follows:

The seller (the “exchangor”) of the property to be exchanged, (the “relinquished property”), finds a buyer to purchase his/her property. By incorporating specific “intent and cooperation” language in the purchase contract, the exchanger expresses the intent to exchange and the buyer expresses cooperation in signing any necessary and appropriate documents to accomplish the exchange.

The exchanger and A Troika Consortium, Inc. (the “Intermediary”) enter into an Exchange Agreement and an Assignment of the Purchase Agreement which provides that:

  • The intermediary is substituted into the purchase contract (and escrow instructions, if applicable) as the seller
  • The exchanger conveys the relinquished property to the intermediary, and the intermediary immediately conveys the relinquished property to the buyer by direct deed from the exchanger

The proceeds from the exchange of the relinquished property are held in a Qualified Escrow Account.

The exchanger identifies in writing the property they wish to acquire (the “replacement property”) in exchange for the relinquished property. The exchangor negotiates the acquisition of the replacement property, incorporating the intent language in the replacement property purchase agreement.

The intermediary is substituted into the purchase contract (and escrow instructions, if applicable) as the buyer.

The intermediary, using the funds held on account, acquires the replacement property, and immediately conveys the replacement property to the exchanger by direct deed from the seller of the replacement property to the exchanger.

Also see our 1031 FAQ for more information.