Joint venture vs LLC to avoid transfer taxes?

[Nikunj Chauhan]

A relative of mine in the DC area is moving to bigger home, but the condo he currently owns (with a 30 year conventional mortgage) is in a gentrifying area that has a lot of upside. He doesn't have the capital to put a down payment in on his new home and keep the current condo. One thought we had is that we go 50-50 on the equity of his current condo and transfer the condo to an LLC. We checked with the mortgage company and as long its a 51/49 split it won't trigger the due on sale clause. In doing our homework, however, we realized that we will have to pay the 2.9% transfer tax once it's transferred to an LLC.

The main question is whether there is a way to avoid the transfer tax? Can we create a joint venture and leave the title in place with him as the owner? If we do that, will I be able to share in the tax benefits?

Thank you!

P.S I'm a newbie and don't have any real estate investing experience. 

[Russell Brazil]

No way to avoid transfer tax.