., a Qualified Intermediary needs to take possession of the funds at closing in order to qualify for a 1031.

I live in DC  and am doing a 1031 exchange and I need a good intermediary. can anyone refer one?

Unfortunately, his qualified intermediary should have flagged this.

I agree with @Todd Magin that you can not take the word of the wholesaler on the rents as they are only an intermediary.

As soon as you close it you can tap a line of credit, 2nd, or refi to pull cash out for repairs to the other one.To complete a successful 1031 you have to use a qualified intermediary.  

The California Franchise Tax Board ("FTB") has ruled that certain types of installment sale transactions that have been "structured" or "drafted" pursuant to Section 453 of the Internal Revenue Code ("Code") and have been promoted and used to "save" failed 1031 Exchange transactions will not qualify for tax-deferred treatment in California when used in this manner.California FTB is Aware of Certain Installment ArrangementsThe FTB is aware of certain arrangements in which a 1031 Exchange investor and/or Qualified Intermediary attempt to convert proceeds from the sale of the investor's relinquished property that is part of a failed 1031 Exchange, or any unused proceeds from a partial 1031 Exchange, into an installment arrangement such as an installment note or other similar arrangement in which payments are to be paid out over two or more years.It was made clear by the FTB that these arrangements do not qualify for a deferral of gain recognition under Sections 453 or 1031 of the Code since, among other reasons, these sections and the federal doctrine of constructive receipt do not support such a deferral of gain recognition.These tax-deferred installment sale transaction structures have been promoted under various names over the years, including Private Annuity Trusts, Deferred Sales Trusts, Monetized Installment Sales, Self-Directed Installment Notes, among others.Qualified Intermediaries Put On Notice1031 Exchange Qualified Intermediaries must withhold and remit certain amounts to the California FTB when a 1031 Exchange either fully or partially fails.

However, I strongly recommend you get a GOOD Qualified Intermediary.

., You've got to have a qualified intermediary (that's the specialist you're talking about) in place prior to the closing.  

The question is: What happens in terms of funding the deal while the transaction is still in the intermediary stage:1.

If you are going to 1031 then don't touch the money hand it to a qualified intermediary for an exchange.