1031 for property co-owned with owner using as primary residence

[Ian Cruz]

Hi everyone,

I was wondering if it is possible to 1031 exchange a SFH rental for a 50% interest in a 4plex (the 50% interest will be of greater value than the prior SFH, paid via cash + commercial loan, and both units will be rented out).

However, the other 2-units will be purchased as a primary residence (with 1 of them rented out, but using a loan for a primary residence). 

I would imagine this would be okay, as the original investor's proceeds are re-invested entirely into an investment property. Would this arrangement cause any issues?