How to 1031 Duplex to Larger Multifamily

[David Murff]

Hey guys, I have a question regarding the 1031 exchange strategy. Been studying multifamily commercial RE and would like to start investing there. I have no track record even in SFHs or Small multifamily. Would it be possible to buy a duplex/tri/quad as an investment property rent it out and in a years time 1031 into a small to medium (5-20 unit) multifamily property? 

1. Am I allowed make the exchange from duplex to say a 12-unit multifamily property?

2. If I were to aquire multiple properties could I then bundle a small portfolio of duplex/triplex/quad into one 1031 exchange to maximize capital and therefore aquire a larger exchange property? 

3. What hurdles might I anticipate when seeking commercial financing on a larger 1031 exchange with only smaller residential lending/properties experience?

Thanks for your time guys and enjoy the Super Bowl! 

David

[Dave Foster]

@David Murff, the answers are yes yes and yes.  You can exchange from any type of investment real estate into any other type of investment real estate.  You can sell several properties and use a 1031 to purchase fewer larger replacements (a consolidation exchange).  And The IRS does not care what type of financing you are using.  The actual use of the property is key.  Commercial lending will have some different underwriting requirements.  But it will be more numbers driven.