Property near SMU

[Bryce H. Chapman]

I’m looking to purchase a multifamily property, single-family home, or condo/townhouse near SMU, where my daughter attends school. My goal is to find a property that suits her needs while also serving as a strong long-term investment. I’m particularly interested in off-market opportunities and would appreciate working with someone who knows the area well.

The purchase will be under my name, but I’d love to take advantage of any benefits tied to my daughter’s first-time buyer status, especially considering her limited credit and assets. This will likely be part of a 1031 exchange, with plans to purchase by spring or summer 2025, before the fall semester.

Thank you!

[Dave Foster]

@Bryce H. Chapman I love the vision here being that I currently am doing this with one of my sons who's going to school.

@Jackson Hanssen is correct here, you can only 1031 exchange into property with the same taxpayer. A TIC agreement would deed fractional ownership of the property to the both of you. You each own a property that happens to be a % of one larger property. And that would let you be on title and do a 1031 into your portion. And she can take title as her primary residence.

But in order to successfully do a 1031 exchange you must purchase at least as much new real estate as you sold. And the property must be held for investment use. So you could 1031 into your portion and take title to that as an investment. She can take title to the remaining portion as her primary residence. And you would "rent" your investment property to her (arms length transaction defensible because she is a related party). That would work fine. You can even gift back her rent to her with your annual gifting limits. And she can always add roommates to generate more income.

Just know that when you later sell she will only be able to take advantage of the primary residence exemption for the % that she actually owns. And you would still be free to do another 1031 on your portion. I wish I could let my son take advantage of the primary residence exemption for the whole thing. But my tax return is still reporting the % I own as investment. That's what keeps it qualifying as the replacement in my 1031.