1031 & LLC & Financing new property

[Chinmay Gupte]

My partner & I have a property titled under LLC. We will be selling it & doing 1031 exchange to buy a new property that is higher price than the property we are going to relinquish. It will be a "like-kiind" exchange.

In order for Fannie Mae & Fredie Mac loan to fund the replacement property, the lender would like us to take the title of the new property in our personal names first & then immediately do Quit Claim into LLC name for the 1031 exchange to happen (LLC to LLC). Is this a valid strategy?

Alternatively, we have been told to take a portfolio loan directly in the name of the LLC - in which case we don't have to take the title first on our personal names & then do QC to LLC name. However the rates & closing costs for portfolio loans are higher.

Please advice how to best handle this transaction & if QC strategy is valid for 1031.

Thanks,

Chinmay