Are 1031's worth it on SFHs?

[Matt W.]

Background; I've 1031'd 4 homes in the past 3 years. I either turned one home into 2 or traded a smaller home for a nicer home that will hopefully appreciate and cash flow more. 

My long term goal has always been to do the Rich Dad Poor Dad idea of "converting 4 red houses into one green hotel" and trading all my single family homes into various big commercial syndications. However, now I'm realizing that most syndications require a $500k-1Million investment if you want to use money from a 1031. Even if I had that much equity, it would be near impossible to sell them all within the timeframe. 

I get the benefit of the whole "swap til you drop" theory, but I (hopefully) have 50 more years to live and don't want to be carrying these houses forever. Now that I'm considering selling and moving the money into syndications, I'm confronted with just biting the bullet and paying the tax and the deferred taxes. It seems like the deferred taxes are just a monkey on your back that I'll have to pay eventually. Given, $100 today is worth more than $100 in the future due to inflation and the time value of money, but I'm not sure it was all worth it.   Thanks for any constructive feedback. 

[Dave Foster]

@Matt W., The biggest hurdle you have to get over psychologically is to feel like you're doing something wrong with paying the tax.  No one ever went broke paying tax on profit.  It just feels like it.  And whether you kept the tax deferred for a day or 50 years, that's a day or 50 years that you made the income off of the deferred tax.  That's a win!

But that being said, you've probably noticed how your portfolio and performance have benefitted from keeping that tax deferred.  And as @Bill B. said, there's numerous ways to keep it deferred and keep getting the compounding effect of the deferral.  While moving through your life.  Each stage of life has on ramps and off ramps and changes of priorities and needs.  The 1031 exchange really can be used to accommodate almost all of those.  

@Ash Hegde is exactly right about options. But if you're totally getting out of real estate. That's probably the only time to break the compounding deferral cycle. And even then you may want to look at a 721 upreit which will give you one last deferral into a REIT which might be compettiive to a syndication. Or just find a syndication that will accept you as a tenant in common. Or a DST as Ash suggested.

I'll reach out via pm to give you a link to my book that discusses these types of options in detail.  Lifetime Tax-Free Wealth:  The Real Estate Investors Guide to the 1031 Exchange. It's really not just a 1031 exchange or syndication choice.