I’m planning on being a silent partner in a commercial deal. I’m dumping a residential property and doing into this as an individual investor buying into an LLC using a 1031 exchange with someone I’ve known for 30 years. Anything I should be aware of?

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I didn’t think you could buy into an LLC because an LLC is not real estate. The exchange must be “like-kind” meaning you sell real estate and buy real estate (including a partial interest).

You’d better check with your CPA or attorney.

Make sure you have documentation on everything and confirm that the process for setting up and timeline is within IRS rules. Your silent but that doesn't mean you can't speak up. Protect what you invest and make sure your verbiage is tight for distributions, exit strategy, and if partners wants out early.

Very clearly define roles and responsibilities and allocate value based on relative contributions. This avoids resentment later on.

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