1031 Exchange out of state anxiety

[April Allen]

I'm feeling stuck. I have two duplexes and my own home, all paid for, totalling about 750k. I depend on the income from the duplexes to live (about  $2,200 and $1600 monthly) but am barely making it. 

I have been looking at MF properties in states other than California such as Missouri and Kentucky, and finding the ROI is much better. MUCH BETTER.

I have been nervous about letting go of the one duplex by the beach that gives me the $1600 monthly, but my RE agent can sell it for 235k, purchased last year for 185k.

I want to purchase out of state with a 1031 and have a property manager that I can trust. 

I also have around 100k saved to use toward purchase.

I guess I'm hoping for reassurance, maybe experienced people who have done this. 

And how do I find the right Agent and Property Manager?

I really need to make more money. 

Also considering taking a LOC on my residence.

Thanks in advance!

[Dave Foster]

@April Allen, the 1031 part of this equation is the least of your worries.  You can find advocates for every location in the country here.  And they're probably all wrong and they're probably all right.  But your first job has to be narrowing down your focus because there's too many options and too much data for you process options effectively.  Some broad considerations:

1. Who do you know whos doing what you're contemplating.  It looks like you're making around a 5% return.  If this is actual cash after all expenses you're going to have a tough time finding things that are passive and safe that do any better.  So hard assets that you put into management will probably be a necessity.  

2. Look for milder rather than harsher climates.

3. Pick your preference of natural disaster.  Almost every location has something to be terrified of.  Pick the one that bothers you the least.

4. Although CA will still get their tax as long as you're a resident, I would still say that you're better off looking for a tax free state cause you never know when it's time to move to one.  And the bump in income just from the elimination of state tax can be significant. 

5. While interest rates are still low I'd look at the arbitrage of interest to revenue.  There's still a bump to leveraged properties.  But use your cash as down payments.  And leave your primary alone.  That's your safety net.

there's some things out there for you.  But you've got to look inward first.  then once you know yourself then look outward to the areas/sectors/properties that fit your investing personality.