Retiring soon, cash flow investing

[Almaz Hayet]

I have a rental in CA with negative cash flow, will do 1031 exchange and have about 100k to invest. Thinking to invest in Austin as I plan to move there. Any advice/suggestions?

[Dave Foster]

@Almaz Hayet, One thing you've stumbled on (probably on purpose) is that you're moving to a tax free state. By deferring the tax on your CA sale you're moving it into TX with no state income tax. So immediately your NOI will get a boost. However, any tax free state will accomplish that since you're moving to one yourself. So if you want to you can also look at TN, NV, FL. These are probably the three most active cash flow real estate states that have no state tax. As long as you continue owning your property or as long as you do a 1031 again when and if you ever sell you'll continue to avoid the tax. And CA can't use the clawback provision to get their hands on the gain. It's a mine field getting things out of CA but if you know the ground rules you'll do just fine.