Using non-professional QI (Qualified Intermediary)

[Josh Prince]

Has anyone had any experience using a friend as a QI rather than one of the professional QI companies.  In a standard delayed exchange, it doesn't seem too hard, and I know John T. Reed suggests not wasting money with a professional QI.  

Thanks in advance!

[Dave Foster]

@Josh Prince, Where to begin...

The guy in Chicago who used his son the attorney as his QI and had a 3.2 mil exchange disallowed.

The guy who let his friend hold his money as QI and then his friend got into a divorce with the proceeds tied up as marital assets.

The lady we were going to do an exchange for last week who decided to save $750 and claim on the settlement statement that the seller of her replacement property was really her QI.  Unfortunately the deal fell through and now she's got worthless checks to a non-existent seller, lawsuits and legal issues from the title co and a huge tax bill.

The guy who's friend told him he only had to reinvest the profit and now has a tax bill.

The lady who opened up a joint checking account with her friend the intermediary.

The specific statutory requirements for documentation.

The dozens of questions I get asked by every client regarding an exchange in process that your "friend" just ain't gonna know.

And the list of risks goes on and on and on.  

I am an intermediary so that probably discounts my opinions but I'm also a buy and hold investor and I don't do my own or have a friend do them.  I hire a good intermediary.

There are some occasions where a 3rd party intermediary is not specifically required but for the minimal amount they charge an intermediary is a pretty huge asset wading through a statutory process that is very complicated and murky.