Melvin Feller MA Looks at the use of a Real Estate Direct Deeding Strategy

Melvin Feller MA Looks at the use of a Real Estate Direct Deeding Strategy

Melvin Feller is known as “The Entrepreneur’s Mentor” because Melvin walks his talk. Melvin Feller has been there and done that and more importantly, Melvin Feller knows how to transfer the skill set for success. This is main reason that he has been the sought after coach to hundreds of small business owners, entrepreneurs, Realtors, Real estate investors and service professional internationally. Melvin Feller’s main talent is to show you how the step by step process to build and enjoy a successful 6-figure plus business while having a balanced life. Melvin Feller is currently pursuing another graduate degree as an MBA.

Real Estate Direct Deeding Strategy by Melvin Feller MA

When you are exchanging property under a 1031 Tax Deferred Exchange, you may choose to “direct deed”, your property to the buyer or have the seller direct deed his property to you. Direct deeding is achieved by deeding your property directly to the buyer rather than to an intermediary, which initially was the common practice in 1031 tax deferred exchanges. The seller of the property, which you are buying then, deeds his property directly to you, skipping the deed to an intermediary.


An IRS ruling in 1990 provided that it was no longer necessary to use “sequential” deeding in a tax-deferred exchange transaction. Many investors have long forgotten this and have created issues for themselves. Under sequential deeding, a deed from the Seller was given to an intermediary who then deeded the property to the buyer. Most property transfers in tax-deferred exchanges today use “direct deeding” rather than “sequential deeding.”


Using direct deeding reduces the risks involved to an intermediary, who would be in title for a short period and exposed to risks of liability for asbestos or other environmental hazards and the disclosures required for those risks. Direct deeding also eliminates the payment of duplicate transfer taxes, which are normally charged each time a deed is recorded.


There are several safeguards you can use when direct deeding. Be sure that if you are using a qualified intermediary, that your intermediary has an agreement with your buyer for the transfer of the property to be exchanged. Also be sure that your intermediary has an agreement with the seller of the property you will be acquiring which allows for the transfer of that replacement property to you.

Real Estate Direct Deeding Strategy by Melvin Feller MA

All parties to the agreement must be notified in writing of your intention to use an intermediary in the exchange. If you are using a qualified intermediary in your exchange, typically the intermediary will have an affiliation with a title or escrow company, which can then provide all the services required to handle the closing, such as title insurance, escrow services, and document preparation and transfers. There are several advantages to using a professional intermediary in your exchange.

These advantages include reducing the potential liability for the structure of the exchange and any tax consequences, shielding the principals from accepting additional liability, and providing an audible trail by way of the assignments and exchange agreements.

Real Estate Direct Deeding Strategy by Melvin Feller MA

When choosing a tax deferred exchange, be sure to be aware of the tax regulations required to qualify the exchange under IRS tax regulations. These regulations will spell out how to identify your replacement property and how many properties you can identity, how you can structure the exchange, how to direct deed your relinquished property to your buyer, how you can receive remaining cash that you may not choose to invest in the replacement property, how to receive interest on your exchange balance in addition to how to handle the closing and other transaction costs.

Melvin Feller Business Consultant, Business Owner, Melvin Feller ministries and MBA Graduate Student Candidate

Melvin Feller MA Texas and Oklahoma. Melvin Feller founded Melvin Feller Business Group and Melvin Feller Ministries in the 1970s to help individuals and organizations achieve their specific Victory. Victory as defined by the individual or organization are achieving strategic objectives, exceeding goals, getting results or desired outcomes and a positive outreach with grace and as a ministries. He has extensive experience assisting businesses achieve top and bottom line results. He has broad practical experience creating WINNERS in many organizations and industries. He has hands-on experience in executive leadership, operations, logistics, sales, program management, organizational development, training, and customer service. He has coached teams to achieve results in strategic planning, business development, organizational design, sales, and customer response and business process improvement. He has prepared and presented many workshops nationally and internationally.