1031 Exchange On My Rental vs. Tearing Down & Building a 4 Plex

[Mark P.]

Hi BP!

I own a single family home in Valley Village and I owe 150K on the property and my pay off date is in 9 years. I break even on the property's rental income / mortgage.  Property is valued between 600 - 900K.  I'd like to find a situation that yields some monthly profit. 

I've been looking to possibly do a 1031 exchange for a 4 unit in Boyle Heights or anywhere where there's some meat on the bone.  I'm in a rare situation where half of my rental property is zoned R3 (4-5 units) and the other half is zoned for single family residence.  I'm working on getting it fully zoned to R3.  When I compare doing a 1031 exchange vs tearing down this property and building 4-5 units I quickly notice how expensive it is to build.  That said my long term profit is healthy if I tear down.  Can you guys chime in on roughly how much it costs to build four 2 bedroom 1 bath units?  This would be two floors.  Is it worth it?  Would selling the property and finding a 4 unit in a more affordable area a better plan?  I'm trying to figure out how much it would cost to build roughly 2400 square feet of new construction from the foundation up.  Thx gang!