Skip to content
General Real Estate Investing

User Stats

17
Posts
3
Votes
Reggie Powell
  • Investor
  • Woodland, CA
3
Votes |
17
Posts

Is a 1031 Exchange a good idea?

Reggie Powell
  • Investor
  • Woodland, CA
Posted Feb 25 2021, 18:56

Hello all,

I have some properties that all cash flow pretty hard and they all have a good amount of equity in them. I bought them with 15 year loans back in 2011 and they’ve all doubled or tripled in value. I’m thinking of selling one of them through a 1031 exchange, but I’ve never done it and I’m not sure how best to leverage my situation. The property I want to do it with is worth 200k and I owe 45k. I rent it out for $1,000/mo. I could bump rents up to $1200 as well (I havent raised rents in a while).

If I do a 1031 exchange, I’ll be left with 155k in sales proceeds (prior to fees). I can take this and put 30% down on a multi family worth 500k. Hopefully I could find something with the same cash flow, but I will be selling at a high point in the market and potentially buying at a high point. And this house I own now will be paid off in 6 years, so if I don’t do anything and I just hold on to it I’ll be collecting $1200/mo off one property I own outright.

What are your thoughts? Should I hold it and enjoy the cash flow and high equity or should I do a 1031 and increase my property value, while also increasing my debt but not my cash flow?

Thanks for reading

Loading replies...