Can proceeds from 2 properties be combined to buy 1 property

[Joan Brazie]

My husband and I are moving to Colorado Springs. We are selling 2 rental properties in Texas.  

1st question, can we use proceeds from the 2 investment sales to purchase 1 rental/investment property?

2nd we are diy'ers and will do all updating work. Can we live in the property while we do the work. If so, how long?

Thank you in advance 

[Phillip Bicker]

Hello Joan,  as far as using the funds from multiple properties into one property, this is allowable for 1031 exchange - as long as you are moving like-kind from investment property to investment property (not owner occupied), so this part is perfectly fine. 

As for living in the unit to fix up before renting is going to be a potential issue. They might question the purchase as it appears initially as a personal/primary residence instead of an investment. I would strongly recommend discussing directly with a 1031 Qualified Intermediary to discuss how to address the potential work done on the purchase.  There are some here on BP or let us know if you'd like a recommendation.