It also improved refinance options down the line, making it easier to pull capital back out for the next deal.It’s a reminder that appraisals aren’t just another box to check for the bank.

I have seen this happen a lot over the last 5 years as credit get tougher and lender's try to prevent losses.The ultimate project to be able to buy a TLC or "Ugly Inventory" put in a low to moderate amount of cash to renovate and hit it big on a high ARV.

Their split was $130k improvements and $220k land.

If you can buy below market value, then put in modest improvements (paint, flooring, fixtures, maybe some minor updates on kitchens or baths), you can often increase rents enough to improve cash flow meaningfully.

If that’s off, even by a little, it can snowball over time and make things really messy and eventually cost you more money when you do decide to work with a CPA or if you sell down the road.One option you could try if you're not sure is having a CPA handle just that first year to get everything set up correctly (basis, depreciation schedules, categorizing repairs vs. improvements, etc.).

Look at reverse or improvement exchanges.If you need to buy first or make improvements, a properly structured reverse exchange (using an accommodation titleholder) or improvement exchange can keep you inside 1031 while solving sequencing issues.

Or, if you think there is room for improvement, you can hire a specialized bookkeeper who will bring you into their processes.Happy to discuss further. 

A lot of competition and low, but decent inventory.

Don’t do it just to do it.If the duplex doesn’t actually improve your cash flow, your risk-adjusted return, or your long-term strategy, then the 1031 isn’t worth it right now.

Since you don’t plan to convert the property into a rental, options like depreciation or 1031 exchanges aren’t available.Step up your cost basis: Add in eligible improvements you’ve made over the years (renovations, additions, even some closing costs).