1031 Exchange, 2 partner LLC, Into 2 Replacements, 1 Each Partner

[Douglas Andrew]

Hi All!  I have a question. My partner and I are seriously considering the sale of a multifamily investment property that is worth $8M, and has current mortgage of say $2.5M. I own 64% and he owns 36%.

The original mortgage was for $1.5M, but we did a refinance cash out (interest

only this time with the same mortgage payments as previous) and took $1M out last year.

For argument purposes, let's say net sales proceeds are $7.5M, and our equity

after mortgage close out is $5M. 

In this case, if we wanted to do separate projects, assuming the assignment of the 

equity and total value would be  ;

Me: (0.64 x $7.5M) = $4.80 assigned value and (.64 x $2.5M) = $1.60 assigned debt

Partner: (0.36 x $7.5M) = $2.7M assigned value and (0.34 x $2.5) = $0.85M ***. debt

In this case, or in any way to meet the separation or new projects objective, can we

do the following?

Me: Purchase a replacement property for $3.35M equity plus $1.6M debt

Partner: Buy into a DST for $1.65 equity plus $0.85M debt?

Thanks for any guidance you can offer!

Doug

Manhattan, NY