#USA #Los Angeles #Real Estate #1031 Exchange #Deferred

Introduction

In a groundbreaking move for everyday real estate investors, Deferred has announced that it has secured $3.6 million in seed funding to further enhance its platform, transforming the process of tax-deferred real estate investing specifically through 1031 exchanges. This funding, which is led by B Capital and Fika Ventures, marks a significant step towards democratizing real estate investments and making the tax advantages typically available only to institutional investors more accessible to the average person.

The Importance of 1031 Exchanges

The 1031 exchange is a powerful tax-deferral strategy that allows investors to sell a property and re-invest the proceeds into another, thereby deferring capital gains taxes. This mechanism has historically represented a substantial volume, estimated at $100 billion annually in transactions. However, a staggering statistic from the National Association of Realtors indicates that less than 10% of eligible real estate deals actually take advantage of this tax break. Deferred aims to close this gap by simplifying and streamlining the 1031 exchange process through its innovative technology solutions.

Innovations and Key Features

Founded in 2024 by industry veterans Judd Schoenholtz, Alex Farrill, and Aaron LaRue, Deferred combines cutting-edge fintech with real estate know-how to provide a more efficient and user-friendly experience in conducting 1031 exchanges. The company’s approach is centered around three main innovations:

• - AI-Driven Compliance Automation: This feature significantly reduces manual tasks associated with the exchange process by automating compliance checks, allowing investors to complete transactions smoothly and efficiently.
• - Robust Fund Security: Deferred ensures its users’ investments are protected by utilizing advanced transaction security measures that enhance fraud prevention and provide transparency throughout the exchange.
• - No Fee Exchange Model: With a unique model that eliminates traditional exchange fees, Deferred takes steps to ensure that clients can retain more of their earned capital without sharing interest on held funds.

Leadership and Vision

Judd Schoenholtz, the Co-Founder and CEO, stated, "At Deferred, we're redefining what it means to be a Qualified Intermediary. This funding empowers us to enhance access to 1031 exchanges for all investors, not just the privileged institutional ones. Our goal is to democratize the process and ensure everyone can leverage this wealth-building tool."

Support from Industry Leaders

The involvement of prominent venture capitalists such as Gabe Greenbaum from B Capital highlights the innovative nature of Deferred’s approach. Greenbaum commented on the ease with which Deferred simplifies the traditional complexities of 1031 exchanges. He noted, "Their platform not only provides significant tax benefits but also modernizes a process that has long been regarded as cumbersome."

Similarly, Fika Ventures highlighted their excitement about supporting a team that is harnessing AI technology to address long-standing challenges in the real estate sector.

Recent Acquisitions

This funding announcement follows Deferred's acquisition of Plenti Financial, which has a robust track record in facilitating approximately 7,000 1031 exchanges. The transition of a Qualified Intermediary like Plenti into Deferred’s innovative approach underlines their commitment to compliance excellence and client satisfaction, enhancing their credibility and operational efficiency.

Conclusion

Deferred’s recent funding serves as a pivotal moment in the journey towards a more inclusive real estate investing environment. By breaking down barriers to entry and making it easier for everyday investors to utilize tax-deferred strategies, Deferred is poised to reshape the landscape of real estate investments significantly. With their unique approach, they are setting the stage for a new era where more investors can access the benefits of 1031 exchanges, transforming their investment strategies and futures. Second, Deferred aims to bridge the gap between seasoned investors and those new to the field, making real estate investment more accessible than ever.
To learn more about Deferred and how they are changing the way real estate investments are approached, visit their website at Deferred.com.