multiple vs single property LLC for future 1031 exchange

[Tyler Brown]

My business partner and myself own an apartment complex and are under contract for two more properties. We are planning to start an LLC and move the properties into this LLC. My business partner prefers to set up an LLC for each property instead of having all properties in one in case we want to do a 1031 exchange in the future.

If we place all properties into one LLC will we be able to sell one or some of the properties at a time through a 1031 exchange, or will this be limiting to us in some fashion?

[Dave Foster]

@Tyler Brown, from the 1031 perspective it doesn't matter. In any event it will be the multimember LLC that owns the property that will be the seller and buyer in a 1031. If one LLC owns all then that LLC will sell the property and purchase the new property. If the LLC only owns that one property then it will sell and then purchase. As others have said you probably want to look at this as more of a liability mitigation issue.