That is a very common requirement for someone with this much equity.

Like Jay mentioned this is a pretty common issue.

You can 1031 into a syndication structured as a DST, but these are less common than syndications that do not allow 1031 into their offerings.  

Death, divorce, disinterest are common. 

New tenants need to be adequately screened, tenant requests and work orders must be addressed promptly, vacant units should be marketed and turned over quickly, and all common area amenities must be maintained.

Originally posted by @Cody Maheu:@Ronald Rohde Partnership agreement / Entity formation Great, here's a free checklist if want some common topics we draft for our clients.

Do we need to remove the property from the LLC back into a joint tenants in common situation in order to bifurcate the proceeds like that? 

Crazy as it seems, this is pretty common when talking to older realtors, lawyers, investors, etc--they don't keep up with the times and have no idea what wholesaling is. 

I had an older building similar to what you are describing and the electric from the common area, gas, water, and lawn care, quickly ate up a significant portion of my cash flow.

It makes it an LP syndication that is a tenant in common with another investor (you).If the syndication is working with their own funding they can generally do this if they choose.