The 1031 industry is in some ways brand new. As a result, it's pretty difficult to determine which firm you can trust. To help sort through the wheat from chaff, we've put together a "due diligence list" below to help you more rigorously research firms to work with. As always, consult your tax and financial advisors.
1) Firm background: Find out how long your 1031 syndicator has been in business, how many transactions they have performed, and how credible the leadership of the firm looks. Many firms have grown out or are subsidiaries of title or brokerage companies. So be careful about differentiation between the track record of the 1031 company and the parent company.
2) Offering: First take a look at what type of offering (Tenants in Common, Tenants in Common Triplenet Leases, UpREIT). Generally, we feel that the UPREIT still has not been approved by the IRS and is thus more risky. Second, look at the properties themselves: research the geography, the tenants, and the general quality of the assets. Finally, how big is their property portfolio. The bigger usually will indicate a larger and more established firm. Also, when you go to exchange it's more likely that they will have a property available.
3) Promised Return: Be careful about exactly what return the firm is promising. Some firms advertise "cash on cash yields" which are really returns to your equity. Others advertise capitalization rates which are returns to equity and debt.
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