Updated almost 2 years ago on . Most recent reply
Ideas for 1031 exchange
Hi there! Am looking to do a 1031 exchange from New York to Austin, as we love the area! We are looking to invest 450 to 500K (equal or higher value from our relinquished property). Our real estate agent showed us brand new single family homes in Round Rock, Leander and Georgetown, however property taxes/HOA seemed high and rents low. Am dubious whether we would cash flow anywhere close to the 1% rule. Curious as to your thoughts on where would be a good investment with this amount of capital - SFH/MFH? Neighborhoods with lower property taxes? Thanks!
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- Qualified Intermediary for 1031 Exchanges
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@Seema Rai, In general, as price point goes up the rent/sq ft or rent/price of asset goes down. One thing you might look at is buying two smaller properties rather than one larger property with your 1031. This is called a diversification exchange. And allows you to purchase in the range where rents are maximized for the size of the asset. You can sell one and buy multiple replacements.
- Dave Foster
