1031 Exchange into Multifamily

[Nicole Wu]

My husband currently owns a paid-off townhome near Charlotte, NC, which is currently being rented out and generating steady cash flow. The lease is about to end, and we are considering selling the property and utilizing the proceeds to purchase a multifamily property to expand our investment portfolio.

We are thinking of using a 1031 exchange to defer capital gains taxes since the sale will trigger a capital gain. Our plan is to use the entire sales proceeds of approximately to purchase the new investment property. However, we have never done a 1031 exchange or purchased a multifamily unit before, and the time requirements are stressing me out.

I would greatly appreciate your advice on where to begin. Should I focus on searching for the new investment property first or on selling the old one? Is it possible to do both simultaneously? Is a 1031 exchange a feasible option for accomplishing this? Any advice or resources on strategies would be highly appreciated.