1031 exchange question

[Mario Martinez]

Good day Bigger Pockets family!

I want to take advantage of this booming market and put one property up for sale. Since I have owned home for less than two years I want to avoid hefty tax bill and sell with 1031 exhange. I have a couple questions, I know properties have to be like kind and exceed my selling number but can it be a few fixer uppers? also can new property be in a different state from where I am going to currently sell. Any other advise on 1031 will be immensely appreciated.

[Dave Foster]

@Mario Martinez, like kind really just means any type of investment property.  You can sell any type and buy any other type as long as it is held for investment.  The other half of your question is yes also.  The number of replacements doesn't  matter As long a you purchase at least as much as you sell you'll defer all tax.  

A sale of a more expensive property followed by a purchase of several smaller fixer uppers is a classic 1031 strategy commonly called a diversification exchange.

And it can be anywhere in the US and a couple of US territories (most notably Guam and the USVI).