I am also a qualified intermediary for 1031 exchanges and I have a portfolio of commercial and residential real estate consisting of 26 different properties, most of which are In the self storage space.  

Word of advice, consult with a reputable, knowledgeable intermediary who does this full time.

The cost for a local company to act as the qualified intermediary will come in around $900.

Hi @Seetha G, One thing that we always recommend when administering 1031 Exchange transactions as a Qualified Intermediary is that the client should obtain an estimated settlement/closing statement a couple of days prior to closing in order to review the statement with their tax advisor and Qualified Intermediary for potential items that will cause small amounts of taxable boot.There are essentially three "buckets" of closing costs.

Also, when considering a 1031 exchange there are costs involved with intermediaries and it really only makes sense to utilize the exchange for larger gains.In your case, it might be better to hold it, rent it, and refi it to get some of that equity out so you can move onto the next project.

A you referring to a Qualified Intermediary?

But what happens is that we as your Intermediary for the 1031 take title to the new property and hold it while the improvements are completed. 

Your capital gain tax, depreciation recapture tax and Medicare Surcharge (Obamacare tax) would all be deferred as long as you acquired one or more replacement properties that were equal to, or greater than, the net sale price of your  relinquished property and you reinvested 100% of your net cash proceeds held by the Qualified Intermediary. 

In a reverse exchange the Qualified Intermediary (that's the role we fill) takes title to the new property in a special purpose entity called the Exchange Accommodating Title Holder. 

Only the portion that has been used as a rental will qualify.The usual cost for a Qualified Intermediary varies amount companies.