minimum equity requirements on a 1031 exchange

[Jacob Sharp]

Hello BPers!

I have a deal I am attempting to structure and I would like to be able to provide some guidance to the other party in order to make the transition easier for him.  He is a family friend and this is the first of what I hope are many deals as he unwinds his RE portfolio over the coming years.

He is selling me a small 6 unit apartment complex.  He doesn't need the money from the sale and wants to avoid the tax hit of realizing the sale by doing a 1031 exchange.  I have a commercial building that I would like to purchase and proposed to him that he roll the proceeds from the sale of the apartment building into the commercial building.  

The value of the commercial building is $1M.

The value of the apartment building is $140,000.

Is there a way for him to roll the $140,00 into the commercial building and avoid taxes under at 1031?  To clarify, I would want to structure the deal so that myself and another person were also equity owners in the commercial building.  Essentially he would be swapping his 100% owned apartment unit worth $140k for partial ownership of a $1M commercial building.

Is this possible?  What do I need to know and beware of to make this transaction go smoothly?

Any help would be appreciated!  Thank you!

@Bill Exeter I was hoping you might be able to weigh in on this!