The funds in this case were likely held in their individual name, and a death, bankruptcy, or other could affect the ability to close out and complete the 1031 exchange.The safety and protection of exchange funds should be of utmost importance, which is why you should always work with a qualified intermediary that has some sort of regulatory oversight; not just an internal audit or something, but real regulatory oversight with an outside, independent regulatory audit. 

Construction update: Broke ground mid September in 30A Blue Mountain Beach area: The Villages Rental property into a 1031 exchange to build a bigger home. 

What write offs/loopholes does anyone know of to help me in this situation. 1031 exchange is out of the question.

I heard that vinegar isn't the best because you exchanging one smell for another and it doesn't get to the root of the smell.

Continue to live in the home and rent extra bedrooms either MTR or STR maybe to foreign exchange students (I know 2 people who do this but neither are in Sacramento).  

To intentionally reduce the leverage more than required is a foreign concept to me.Best wishesI think the real problem here is a complete misunderstanding of what REI really is. 

-Mexico citizen, born and raised in Colorado, and over the past few years I’ve been actively investing in Mexican real estate — mostly in presale condos and long-term or vacation rental markets like Guadalajara, Cancún, and Lake Chapala.I originally started by looking for affordable, well-located properties for personal use, but as I dug deeper, I realized there were real opportunities for long-term appreciation, rental income, and geographic diversification — often with as little as $20–30k down.The process isn’t as complicated as people think, but there are definitely key things to understand, including:How foreigners can legally own property in Mexico (especially in restricted zones like the coast),How presale contracts and developer relationships work,What kinds of rental strategies are viable in different markets (Airbnb, mid-term, or traditional long-term),Currency and exchange rate considerations, title safety, and banking between the U.S. and Mexico.One major advantage of presale in Mexico is that many developers offer in-house, interest-free financing during construction, allowing buyers to spread out payments over 24–36 months — without involving a bank or mortgage process.

If you do decide to sell, you also have the option to do a 1031 exchange, which would allow you to defer all of the tax and depreciation recapture and reinvest it into other investment real estate.

I’ve seen a few approaches that cut that time down dramatically — happy to exchange ideas if anyone’s interested.

 Something else to consider is actually a 1031 exchange, this would allow you to access the equity in your home, not pay taxes on it and get a step up in your tax basis.