Where/What would you invest with $300K in 1031 escrow money?

[Jonathan Serna]

Hi BP,

Looking for some advice from the BP community. We are a few weeks away from the sale of our NYC apartment. This will net us $300K profit that will have to be put into 1031 escrow to defer capital gains tax. I missed the 121 exclusion by 4 months (I know...). We are currently living in Richmond, VA. Ideally we get a multi family in Richmond and call it a day. I want to diversify our portfolio and possibly get a multi fam in Richmond and a STR in a vacation market. My question to you all is... WHAT WOULD YOU DO? 

[Bill B.]

The $300k “profit” doesn’t matter. How much was the net sale? That’s the amount you have to purchase. (If you made $300k on a $2million sale, you need to buy a $2million dollar new deal and the advice will be much different than if you sold a $400k property and made $300k.) That also brings up another question. Are you prequalified for more than your net sale or are you going to owe taxes regardless? You’re going to want to have that new loan written in stone to make your deadlines.