We currently own our house and a triplex in CA, along with some fourplexes in AZ and CO. We plan to leave CA in the next 5 or 6 years and probably move to CO, so we're trying to determine the best strategy to offload our properties here. I did a little research on reverse 1031s, and this is what I'm thinking:

1) Buy some rentals in CO as our reverse 1031 replacement properties; maybe a fourplex plus a house we could live in later on, and have our PM manage them for us as rentals. We have enough cash that we could put 25% or so down on each without needing to tap into equity of any of our current properties. These replacement properties would go in the required EAT.

2) Name our CA triplex as our relinquished property, list it, and sell it within the required time frame.

3) Use the proceeds from the triplex to finish off the reverse 1031, and I guess that will reimburse us for the cash we used up front to buy the replacement properties.

4) After a couple years, we'd sell our current home in CA and avoid capital gains tax on that profit, then quit using the house we bought in CO as a rental and move into it.

So, my questions:

A) Does that all sound feasible? Is there something I'm not considering that could pose a problem (besides the obvious, like not being able to sell our triplex within the 180 days or something)?

B) It looks like there are companies who specialize in handling reverse 1031; which state would be better to find someone in for handling this, CA or CO? How do you evaluate these companies?

C) Any problems/issues with having the rentals managed while in the EAT? And then getting it out of the EAT and into our names?

D) We manage our triplex ourselves, so that's why I was thinking it would make sense to put the replacement properties in the EAT instead of the triplex, so we don't have to deal with the whole LLC issue with that; is there something I'm missing here?

E) What kind of problems do lenders typically have with dealing with a reverse 1031?

F) What starts the clock on a reverse 1031 in this scenario? Is it the purchase of the first replacement property?

Woo, that turned into a long post! Any feedback appreciated!

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