Buying out note to have more to exchange..
This is a bit complicated.
Selling a property, large gain, I am 50% owner, planning to separate my proceeds and exchange into another investment property. We are having to carry a small note for the buyer, 1st position but buyer wants language for us to agree to subordinate to 2nd position if he decides to get a construction loan to build.
In an effort to exchange as much as possible I’d like to explore ways to buy out my 50% portion of the note we are carrying for the buyer. Basically I add my 50% of the value of the note in cash, so I can exchange my full half of the proceeds from the sale. If I don’t do this when the note is paid off it will be taxable.
The issue I see is my partner is taking his proceeds a different direction for his exchange, and doesn’t have the 50k cash to buy his portion of the note.
Question- how can I achieve this with out agreeing to be in second position now (and then third of buyer wants us to subordinate for a construction loan)?? Can there be two equal position equal value notes on a property? Ideas?
I know talk to an attorney, I will most likely, not sure if I’ll have time closing very soon. Thanks!