Original first position lender most likely will not allow it2.

I assume that for tax purposes in the 1031 scenario, just like the basis and depreciation gets transferred to the new investment property I can continue expensing the loan interest to the new property (because it was used to acquire the original investment). 

However, my partner is on the original property's loan that we are selling.

I’ve moved property from my personal name to an LLP and the title company said the insurance is still good as long as the original purchasers are primary owners of the LLP.

At the end of the day, total finance charges (interest, origination and pre-payment penalties), leverage and cost of equity should be considered when deciding on the financing option that makes most sense.

First, review the original lease agreement to confirm that they are jointly responsible for the rent.

Unfortunately, a can of worms was opened when things were taken further then what the township originally wanted.

We like to give very detailed quotes up front explaining known fees such as origination fees, any underwriting or processings fees, and estimates on variable fees such as escrow fees or title fees.

It is not really true because to get the same rate it will cost much more in upfront costs in either origination or discount fees, AND much higher back end fees in pre-payment penalties.

Nobody has a crystal ball and knows what the future holds, but if you want to introduce a partner/sell ownership interest its far easier if the property was originally owned as an LLC rather than in your personal name because selling membership interest in an LLC is far simpler than re-titling real estate.