Use Profit from Rental Property Sale to 1031 into several turnkey long-distance rentals?
Hi, BP!
I just joined after having read numerous articles and forums on here for some time now, and now I am planning my next move.
Here's my situation: bought my first property - a condo - in the north Seattle area as my personal residence at the beginning of 2009. A growing family prompted me to upgrade to a nearby house, which we did in 2013. Thanks to reading material on BP, I'm renting out the condo from 2013 - 2016 to some ideal long-term tenants, and make about $100 in positive cashflow every month (my primary purpose was just to have them cover the condo mortgage + insurance + property taxes + HOA dues + maintenance costs until the condo appreciated enough with the recovering market to sell for a profit). The condo has appreciated quite a bit now and is predicted to keep doing so throughout the next year. When I sell next year, I may have a $75K net profit after closing costs, improvements, realtor fees, etc. I want to do a 1031 exchange with that. I could use that as a down payment on typical $375K SFH here in the Seattle area and manage it myself again, and at most I might get $300-$400 positive net cash flow every month. However, I'm busy with career and family and can probably count on more maintenance involvement with this new property, and a PM would of course decrease the net cash flow. I'm thinking of doing what other BP investors in expensive areas have done: put my money in less expensive markets where it can go further. Specifically Memphis invest with Chris Clothier. I figure I can get multiple properties with the $75K divided up into the down payments for each of them, and cash flow of closer to $1000/month from all combined. Plus their well regarded PM.
So after researching Memphis Invest and reading up on 1031 exchange rules, my initial question is whether it is realistic to identify and secure 4 or 5 properties with the 45-day identification period allowed by the IRS?