However, even in an equal exchange, recapture tax might apply.

OCREIN - 1031 Exchange in Todays MarketOCREIN - 1031 Exchange in Todays MarketGood Investing...

Success today comes from precision, lean operations, and leveraging the right people and tools.By consolidating my team, leaning on AI and compliance-friendly texting, and building strong realtor partnerships, I’ve been able to consistently close deals while keeping my operation nimble.If you’re running your wholesaling business like it’s still 2019, it’s time to update your playbook. great information thank you for sharing. trying to find teardowns, land lots in the concord NC, or Fayetteville NC for build to rent or spec homes.

Jeff how much are you exchanging?

In this case I would think you would carry the insurance costs for him since he's living on the property in exchange for maintenance work. 

@Austin Deardorff, TIC products, syndicated by broker/dealers under SEC law do qualify for tax deferred treatment under a 1031 exchange.  

And if they only do a few exchanges a year it's hard for them to give you economy of scale on pricing. 

If there is anything I can contribute or offer in exchange for some knowledge I am more than happy to chat and meet!

Unless you decided to do a 1031 exchange, which would allow you to indefinitely defer all tax and depreciation recapture.

Putting more debt on a property that is a potential problem just adds to your problems.If you find that you'd ultimately rather sell the property and find an investment property with better potential, a 1031 exchange could be a good option to make use of all that equity and reinvest into something better.This would allow you to defer all of the tax you would normally pay and reinvest it into another investment property/properties and scale into better real estate and markets.One other question that might make a significant difference: Have you lived in that house for 2 out of the last 5 years?