1031 Exchange with Tenancy in Common
Hello, my parents would like to sell their investment property and buy a new property thats bigger. They are unable to qualify for a mortgage currently as they are out of work so I am stepping in to help. I would like to know if what we're thinking is accurate and doable. My parents would roll all their proceeds from the 1031 exchange into 75% of the new property. I would own the other 25% of the property as a tenant in common. I would likely take out a mortgage to cover the 25%. I was never on the title on their investment property that they are now selling. Is this doable? How do lenders usually approach transactions involving tenancy in common?
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How big is the property they are buying how big is the property they are selling? To set up a TIC (tenant in common) for a 1031 exchange there is a legal entity and process that needs to take place. It is doable. You will need a real estate attorney who does this sort of work, your CPA needs to be involved and it sounds like a lender. Hope that helps!