BP, I need your help!
I am considering the purchase of a small commercial property using a SBA 7a loan. The loan would be in the name of an LLC (an eligible passive company). I would like to finance the property without selling another rental property I own in my own name. I understand that I can utilize a 1031 exchange to sell the property and exchange it for the new property now.
However, I would like to avoid selling my investment property as I am in the accumulation phase of my investing life. I would like to add the condo to my portfolio. Can I purchase the condo and at a later date, if I determine it necessary, sell the investment property I already own and 1031 exchange the proceeds into the condo I have since purchased? Is there a way to buy into the LLC that owns the condo or some other scenario?
I'm interested in this. I don't have an answer for you, but I would think this is gray. Looking forward to any help you receive. What is a SBA 7 loan by the way?
SBA offers a couple of different loans to support real estate and capital expense purchases. Here is a nice summary of the two offerings I am aware of:
@Tim M. , It sounds like you are wanting to purchase your new property now and a few years from now use the proceeds from a 1031 exchange to apply to this property you are buying now.
If so that will not work. You cannot exchange into property you already own. And even if it is titled in a different entity it's probably a single member LLC and I imagine it would still be you as the tax payer.
Are you planning to owner occupy this property? SBA loans require the owner's business to occupy at least 51% of the property.