True Joel, but like pulling teeth to get Syndicators to show you their track record, ie actual total returns with breakdowns of distributions + capital appreciation + principal paydown etc, and SEC so loosely governs Real Estate that it's the only investment category that doesn't require standardized return metrics like the 30=day SEC yield on any fixed income product is mandatory, or audited GAAP accounting standards on finacials from public stocks/Reits etc Real estate seems to be still a bit more un-regulated "Wild Wild West" than other parts of the investment economy, but i guess hence the much better returns i've had in real estate, risk = rewards This is why the good sponsors get have audited financials and have a third party verify their track record.

We hired a Six Sigma Blackbelt systems guy to perform regular audits of turnkey providers to make sure they continue to meet our very high standards.Be sure to speak with one of our investment counselors as well to get the inside scoop!

Are you auditing financial statements or something else?

If the IRS or state audit team could prove that you really had the intent to live in half all along they can disqualify your 1031 Exchange. 

HI David,Technically with the interest tracing rules, the interest should be deducted on Schedule E (against your rental property) regardless of which house actually is being used to secure the loan.If you are ever audited, an IRS agent might try to argue that the mortgage interest should be deducted on Schedule A if you secured the loan with your principal residence, so make sure you keep good documentation proving that you used the funds to purchase a rental.

For anyone who reads this and looking for the info, it cost $100 for the audit which goes towards to cost of your project.  

With this method, we can be confident that our conclusions are based on thorough research and impartial analysis.

If your return is audited and if the exchange is questioned the field agent may question you and it will be your responsibility to demonstrate what your intent was.  

We also do some audit work.

Unless you are going to do a full IRS audit (on smaller properties at least), I really don't see the value in any of the data provided by the owners - so much is dependent on how that individual manages their property and their honesty.