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1031 Exchanges

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JJ Mayer
  • Rental Property Investor
  • Bloomington, IL
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?- Financing the Back End of a 3-for-3 Exchange; Maxing Mortgages

JJ Mayer
  • Rental Property Investor
  • Bloomington, IL
Posted Oct 16 2017, 18:35

Doing our first 1031 exchange, where we are selling a package of 3 single-family properties, which we hope to turn into 3 or more turnkey properties. Currently, all 3 properties are held jointly (and equally) by 3 individual partners, not as an LLC.

When we purchase and finance the 3+ properties on the back-end, we want to structure our deals to maximize the # of traditional mortgages that we can get between the three partners.  Questions:

  1. If we get three new properties on the back end of the exchange, can each new property be financed under only one of the partners names?
  2. From a 1031 perspective, do all of the purchased properties have to be held in all 3 partners names?
  3. If Partner A takes out the mortgage for any of the properties, does holding the deed in all 3 partners names cause any issues for the mortgage company?

Any advice is truly appreciated.  Thank you!

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