1031 Exchange On A Small Office

[Jeff Summers]

I am a buy and hold investor of single family homes.  Recently I was approached by a large hospital and asked about selling my small commercial building that houses my primary business.   The hospital intends to expand a clinic 2 lots down from my space.   They just bought the property next door for 4 Times what I paid for my commercial space 12 years ago.  This deal could nwt me in $ 1.2 - $1.4 million range.   

The dilemma I have is finding a 1031 property  with a cap-rate that would allow me to relocate my business to a leased space and also pay me an income.  In short 8+ %.   I’m considering multi-family and commercial.   It’s likely that I will have to leave my current market to find such a thing. We are in a red hot market in the Southeast.  

What types of properties would safely yield such a return ?   What markets are apt to be good buy and hold markets for cash flow ?  New to the forum. Thank you for your help.