Bowling alley? Like for Like, mixed use?

[Mike Spence]

Hi, had posted this as a reply but better suited as it's own I think. 

Hoping someone is up for the intellectual challenge of this situation...

I'd like to sell my 2 unit residential duplex (in my name) and 1031 into a property that's a bowling alley/bar/3BR apartment. Given the apartment and long term rental (bowling alley could be leased to an LLC if needed), is that a like kind exchange?

With the liability of the bowling alley and bar I'd want an LLC (presuming I owned the bowling co). But if I'm 1031ing from my own name, would I then wait the 12-24 months before LLC? Seems risky?

Any related advice or blind spot ?

Thanks, 

Husband of wife who said yes to a bowling alley.

[Mike Spence]

Quote from @Bill B.:

As long as the real estate portion of the purchase is worth more than the property you’re selling you should be golden. (If the total is close to your selling amount you’d want an official appraisal saying how much the bowling business was worth separate from the real estate, which I assume wouldn’t be much? Maybe? (You can’t exchange in to the bowling business, just the real estate.)

I wouldn't worry about the LLC. I assume the business has insurance, talk to your local agent about what you need, throw an umbrella on top if you have a high net worth a low threshold for risk.

You could pay for the bowling business completely separate if you can get the seller to seperate it and pay for that with an LLC.

If you want a better/more specific answer post the net proceeds from sales and purchase price of purchase and ask the local expert @Dave Foster for his opinion. (And then use him for your exchange if you don’t have a QI already.)

Good luck and let me know how it turns out. 

Thank you Bill! Love the idea of separating the business... also because of looking at financing and weighing pros and cons of partner. If split , the 1031 to the property would work in my name, business purchase could be with partner. 

250k proceeds from duplex sale (pre-tax). New property $850k. In case you're curious: https://search.townehousing.com/idx/details/listing/d017/B14...