1031 exchange into TIC or LLC

[Philip Hernandez]

I have a potential partner that has sold an investment property and moved the proceeds into a QI for a 1031 exchange. How would it be possible to purchase a multifamily property using the funds from this exchange? I've heard conflicting information regarding using TIC's to set up real estate purchases in this way. Also this partner would be contributing most of the capital for the purchase, and I would be doing most of the work, is it possible to set up the TIC so that the partnership would be split up 50/50 like this, or does it require that % ownership match capital contributions?

[Pedro Morais]

@Dave Foster your post is very insightful! Considering the scenario where two investors are buying a new MF property together (lets say for $1M) and one of them (lets call him ‘investor A') is using 1031 exchange proceeds from a property sale of $500K that will generate a total net amount of $100K. In this case would ‘investor A' needs to take title to 50% of the new property even though his contribution to the down payment of a traditional 75% LTV loan would be less than 50%? In other words is the sale price of the relinquished property the only factor determining how much title ‘investor A' needs to take vs how much money each will bring to the table?

Finally, what would be the correct way for these two investors to take title in the new MF property? Would it be correct to create an LLC where the two of them have a 50% stake?