Buy one or two properties with proceeds of 1031

[Tom Albares]

We are closing on the sale of a condo we own at the end of the month.  The condo was used for several years as a short term rental.  The proceeds are $140,000.  The condo sold for $375,000.

We could take the entire $140,000 and put it towards a single family home to be used as a long term rental, and get an interest rate around 7.5%.  It would have to be a home just barely worth $375,000 or greater, and would hopefully cash flow.

Or we could go for two single family homes, less expensive, and put $70,000 down on each.  We could target homes more in the $300k - $325k range.  Still, at least 20% down on each home.  

These would be in an appreciating area, so cash flow will be low. 

Would you please give me your opinion?

Also, in this metro area, new construction homes from all of the big builders are being sold complete with all appliances and blinds for less than resales.  Home owners have not reacted to the down turn in pricing as fast as the new home builders.  With that in mind, would you target a new construction spec built home over a more expensive resale?