JV Partnership with a 1031 for MultiFamily

[Marjeanne Fields]

Hi Everyone, We are doing a JV partnership on this multi family deal we found in Texas. Have an interesting challenge though.....

I have an investor looking to possibly 1031 exchange. However, we have already gotten approved for the loan. Lender is saying it will take two extra weeks to close. Seller does not want to push past December 31. 

Any suggestions on possible ways to bring in the 1031 and get this deal done without extending closing? Any and all suggestions are welcome. 

[Dave Foster]

@Marjeanne Fields, not sure how that could work anyway.  If you're setting up a partnership then that partnership is going to be the taxpayer for the property.  And your investor needs to take title to investment property not an interest in the partnership.

Would the lender allow you a partial release? The Partnership takes title to the entirety and when the investor sells and starts their 1031 they purchase a % of the property as a TIC with the partnership. The partnership sells at cost of acquisition so there's no profit there. and the bank is happy because they got a partial pay down of loan.