Utilizing my 1031 Exchange: what’s my best option?

[Noah Lomax]

Hi BP Experts,

I am working with my first 1031 exchange and am looking for some advice.

I sold a property in California for $855k, resulting in a net of $236k in my 1031 exchange account. I have utilized $136k purchasing a SFR for $555k. I just found amazing condo property for $255k. It's 1/2 that used to be a 2/2. Needs cosmetic work (replace all floors, cabinets, vanities, put the wall back in to make 2/2) and has $9k assessment I must pay.

At asking, this leaves me just $50k shy of utilizing my 1031 exchange.

1) do I have to use 100% to avoid paying capital gains?

2) if so, is it based on selling price or appraisal?

3) if selling price and I have to use 100%, are there any ways to creatively (legally) utilize the money (e.g paying a higher price but getting a credit back for the renovation work)?

Thank you in advance for helping this rookie!

Noah