Sometimes, it is that little extra that gets you over the hump to acquire/control a greater asset than you would have without withdrawing those funds.Take a moment and think about all those numbers that have been thrown around.

I saw the growth in the area and knew it would be the stepping stone I needed for financial freedom.

Cheers to building financial freedom together!

i have 2 question. do i pay the capital gain tax in the state where the asset is located. how much do i have to pay in taxes if i do not want to do a 1031. 

Then he could take the asset as a distribution without penalty and build on it.

I would just recommend only partnering with people that you really trust and make sure that you have legal documents clearly explaining everyone's role, expectations, and contributions (both financial and work wise). 

This may be a wholesale transaction, a duplex, or even a single-family house.Get a trustworthy group of experts together, such as financiers, contractors, attorneys, and real estate brokers.

You'll still want to vet them like a regular borrower but make sure you're first position in the loan and have an attorney draft up the promissory note for you with the asset as collateral. 

@Lisa GoodingI recommend finding a tax strategist that specializes in real estate taxation and is also a fee-only financial planner.

I would put no other assets into this entity such that, if it is sued, there is nothing to lose.