The transaction involves the sale of your relinquished property through a Qualified Intermediary.

It can be completed on a simultaneous basis without a professional Qualified Intermediary as long as the parties know how to properly structure the transaction so that it qualifies as a 1031 Exchange. 

The process is very simple and there’s no need to play a shell game with intermediary banks or attorneys, even though I know you’re doing all of this legally.

Using the loan servicing account as an intermediary account would probably work with invoicing.Ann Bellamy: I have John Hyre’s KISS book, it’s great.

You must use a Qualified Intermediary (QI) to be able to defer taxes.

The rental property he is buying is $275k.He would like to only do the 1031 exchange using the $60k profit (capital gain) on the vacant land he's selling, and keep the other $80k (original purchase price amount for the land) for other purchases (possibly not real estate related).The 1031 tax company (intermediary) has told him that he must put the entire $140k (selling price of the land) towards the purchase of the new property.

It is a direct exchange that does not require a qualfied intermediary, but a §1031 exchange, nevertheless.Your client who traded up could have taken advantage of the tax deferral benefit of a §1031 exchange if s/he had traded up in both equity and debt.

As for landlord experience, I've lived in DC in 'group houses' where I acted as the intermediary between the owner and the tenants (myself included) as far as ensuring rent is collected and deposited, new tenants fill the rooms, the property is clean and any issues like toilets, boiler, furnace etc are maintained.

Is there some type of guarantee or built in intermediary?

Typically, an intermediary will take title, sign the contract with the builder and have the improvements completed.