1031 exchange and commercial loan
Our tenants will be moving out in a few months which prompted us to think about what we wanted to do with our rental property. It's only been rented out for 2 years and it's gained quite a bit of equity (approximately $400k).
We have 2 options in mind. One is to find new tenants and keep renting it out. The other is to 1031 exchanging it into a commercial apartment complex in a less hot market. The idea of 1031 exchange is appealing because it'll likely help us scale up our portfolio. My main concern is how we're going to qualify for a commercial loan since we have a relatively high debt to income ratio since we have mortgages on a couple other properties already. I understand that it usually requires a 30-35-% down which we can do after we sell the current property.
Thanks for your feedback.