What is the best approach to this situation??
Hi, so I am in the process of rehabbing my current rental property in hopes of doing a 1031 exchange. As I am in the midst of the rehab I am realizing that it may be a better option to pull equity out and purchase a multifamily without selling. My mortgage and everything is under $900 and currently in this market (Sacramento, Ca) I can rent it out for $1700 (3 bed 2 bath SFH). I have quite a bit of equity in the property, over 200k but everything is really overheated in this market. So recently a home owner approached me and wants to sell a duplex that she owns for $325,000. It is a 1700 sq ft. property and each side is a 2 bed 1 bath. She currently has one tenant on Section 8 paying $950 a month, and she is in the process of evicting the other tenant so the other side would be clear, and I would be able to charge $1200 a month in this market at this time. If the owner puts the duplex up it will probably sell for more, but I am not sure if that is the correct approach in this market. I am becoming more confused as to what I should do, and I do not want to make a bad move and then limit myself in the future to buy another property if I eat up the equity in my first home, and then do not have a ton of equity in the multifamily. I need to make a decision soon, but I was just reaching out for some advice. Thanks for your time.