Rental Property Investor · Newport Beach, CA · Member since 2009 · 32 posts · 2 votes
I am currently working on a project in which we raise private money and create and LLC which provides seller financing to individual investors. [LINK REMOVED]
I am seeking insight as to if it is possible for an investor with 1031 money to contribute to the LLC which is in effect selling notes.
Investor · Pawleys Island, SC · Member since 2008 · 1k+ posts · 837 votes
16y
One of the general 1031 requirements is that the titled owner of the relinquished property must also be the titled owner of the replacement property.
Even if your LLC uses the investor's capital to purchase real estate, the title to the property stays with the LLC. Don't quite see how the investor is anything more than a lender in your scenario.
What does the investor get for his money -- real estate, a membership interest in the LLC, or a secured mortgage for the loan he gave the LLC?