Quote from @Bradley Buxton: @Marcos De la CruzCheck with a 1031 Qualified Intermediary.

Compare it with other jurisdictions where, by law, the administration has to give a definitive answer within a certain amount of time (2-3 months, otherwise the license is granted de jure) and you will understand why it might stifle enthusiasm.

In many cases, pairing your property LLCs with a holding company in a state like WY, DE, or NV can give you an additional layer of protection.In my experience, the cleanest structure is having each property in its own LLC—at minimum, one LLC per state where you hold rentals.

De minimis safe harbor rule is your friend. 4.

I like @Paul De Luca recommendation for option 2 because of the DTI situation and your overall goal of buying the next property.Either way, I don't think you can go wrong with either of those awesome Chicago neighborhoods, unless one is much closer or further away to the blue line - that could really help with your appreciation and long-term value!

The property sits at the bottom of a cul-de-sac and gets runoff from the road and nearby lots.

@Paul De Luca thank you

@Paul De Luca I am in Chicago so I think there is something about fair housing that tells how many renters can be in a unit .my question is do I have to follow thay or can make my own rule 

@Paul De Luca Great, thanks for the advice.

Converting them into primary residences will really benefit you if you're going to hold forever.Another strategy our clients will pursue is sell those properties using 1031 exchanges and purchase passive instruments like NNN commercial properties or Delaware Statutory Trusts which will keep the depreciation recapture deferred.