What should I do with 800k in 1031 money?

[Bob Upgren]

Quick question. Would appreciate thoughts on this.  I have approximately 800k in 1031 money that I would like to move to the Phoenix market.  My market is saturated and the appreciation levels are stagnant.  If you had 800k, would you buy one property, multiple properties, or another strategy I'm missing. I'm considering buying single family that need minor updates like paint, flooring, and maybe a new kitchen.  Doing the renovations to create equity and then using the home as an Airbnb.  Thanks so much for you input and advice!

[Bud Gaffney]

Congrats! BUY and HOLD as many units as possible:)

Ca$$$$$$hFlow.

[Justin Carmack]

That's great news! If I was sitting on $800k I would BRRRR multi-family properties. Once you rehab and stabilize/increase rent you can pull the money back out in the refi process and do it again.

I might also look at buying old industrial buildings and turning them into apartments and shared office space.  I'm in the Midwest so there are a lot of old industrial sites that could be converted.

[Bob Upgren]

So you think I should buy multiple properties and carry debt on each as long as they cashflow? Just want clarification.  Ultimately, I'm after the apprection of the properties. 

[Bob Upgren]

Thanks Justin!

[Justin Carmack]

I don't want to tell you to carry a bunch of debt if you're not comfortable carrying the debt. Everybody will have a different comfort level. Personally I leverage my properties and carry debt on the property up to 80% of the value.  Make sure the income from the property can pay the mortgage, insurance, etc.  You can split that $800k into as many properties as needed.  With a 1031 you're working with a short window which will require you to identify properties within 90 days (if I remember correctly) and close within 180 days or so.  Just know that anything from the $800k that doesn't go toward the purchase of the new properties is typically taxable income.  Consult with the company handling the 1031, accountant, attorney, etc to make sure you meet all of the requirements.