1031 exchanging for cheaper properties

[Steven Barr]

Hi BP-

If I take 4 homes that are all valued at $250k and sell them (say I have 20% equity), I would then have $200k (don’t worry about realtor fees, closing costs, etc for this example)

Could I then do a 1031 exchange with the profits from these 4 homes, and go buy 8 homes valued at $75k each and put 25k down on each of those 8 properties?

[Jon Taylor]

@Steven Barr

Back of the napkin here (without calculating net sales price): You've sold $1M worth of property, and you're trying to acquire $600k. In your scenario, you'd defer approx 60% of your tax liability. You'd need to spend all of your equity net proceeds ($200k), and buy at least $1M to defer everything.