1031 and FAFSA plus WWYD with investments

[Alys Brown]

Experienced renovator but newbie investor + single mom with 2 kids, 9th and 4th grades. I own real estate I've renovated and all are paid off in full: 

#1) primary home until mid-last year (approx $1M), market in going up and in fast-growing top 20 city and close to center city. My plan was to rent it (approx $4200/month) for 2-3 year, use the money to make updates and capture further growth, then sell and put into 1031 since I'm single and will have closer to $400K appreciation. We moved to a better school district; I'm renting now until I can find a house to renovate. It will be much cheaper than this house. I've learned my lesson about larger and expensive houses - more costly to maintain and harder to rent out. 

#2) Former home in another state, worth approx $275K, currently rented for $1500/month. In a growing beach resort. No chance of flooding. I can rent yearly but not AirB&B. I had a lot of interest when I rented it out last summer and have a great tenant. I rented it out several years ago - I can keep it rented, although quality can be an issue at the beach.

#3) Land in same place as #2. Was going to build when I moved. Approx value is $300K. It's in a desirable neighborhood in a growing beach resort....but not so close to water that it will be flooded. Land is worth more than building and then selling.

Also investing in a new business idea I have. I own another business that has seen a steady decline so time for something new.

Any suggestions are welcome re:  

1) Maximizing investment potential. I find it hard to sell once I buy! And I like to own things outright - easier to sleep at night, since I'm the only income producer, but I know not always the best investment idea. Also, almost all my net worth is in real estate. 

2) My older kid wants to be an orthodontist and has many years of schooling ahead, so if I can make any changes now knowing FAFSA is coming in 1-2 years, this is the time. 

Thanks for reading this long post and especially any recos!

[Daniel Dietz]

From my experience the basically the only two things that don't count as Parental Assets are most retirement accounts and cash value life insurance.

My wife had receive a sizeable inheritance right when our kids were getting to that age. I have an older Universal Life Policy that we dumped most of that into. There are different rules for most plans now a days. If was able to pay the premiums internally and earn 4-5% on top of that. I think that *maybe* annuities fall under that rule too. 

If you are self employed, even part time, you can open a SOLO401K which has pretty high contribution limits and you could do some of your real estate that way.

One other thing to keep in mind is that it is the "net" value of your investment properties that counts. Meaning if it is worth 100K, and you own 80K, your net value it 20K.

A new book that just came out is Debt Free Degree that is avaialble on the Dave Ramsey website that I have been hearing great things about.