All Forum Posts by: Matthew Seguin

Thank you, @Steve Wolterman and @Dave Foster for the quick response! 

Dave, that is correct -" Right now, your LLC does not own real estate. It owns a membership interest in an entity that owns real estate." - Why would I need to "buy them out"? Couldn't they give up their % ownership and cash out?

@Jon Taylor we follow the GP's decision, so it is expected to be by the end of 2022.

Hey all,

I hope to get a better picture of the process, if possible, on the following 1031 exchange scenario:

Three years ago, two partners and I formed an LLC to invest as an LP investor in an MF deal. Currently, the sponsor is planning to sell the property in the near future, and the two other partners would like to cash out - therefore, pay taxes on capital gains. I would prefer doing a 1031 exchange with my invested amount and gains but I realized that it has many complications.

From what I understand, the easiest way would be if all of the partners decide to do a 1031 exchange and do it under the entity level - unfortunately, that's not the case. 

Could someone share if it is possible to do a 1031 exchange on my own on my proportionate amount, and if so, how? 

Thanks!

Hi @Sol Romand, 

There are several routes you can choose from since you have the option to offer all cash. 

If you want to finance the property, it would most likely be a bridge loan through a Hard money lender (12-24 months, 20-25 yr amt, 8%-12% rate, PPP).

If you choose to close all cash, you may be able to fill in the apartments and negotiate better financing terms than the hard money, backed with several months showing a healthy cash flow and signed leases.

Upon stabilization, you'd be able to refinance to a long-term loan with better financing terms.

Hope this helps

If the strategy is solid and backed by a group that has the experience and is willing to put skin in the game, many banks can offer a bridge loan.

Otherwise, in most cases, you will probably have a better chance of reaching hard money lenders.

Hi @Manuel Rivera,

I agree that in most cases, you should reach out to local or regional banks. 20% down is pretty standard but might vary according to the credit score, location, borrower's strength & experience, and more.