1031 Exchange a Rental Sale Profit into 4-5 long distance turnkey properties

[Charles Moore]

Hi, BP!

Just joined up after being a long-time reader because I finally need to ask: when doing a 1031 exchange, is it realistic to identify and secure 4-5 properties in the 45-day identification period (and abiding by all the other 1031 rules)? I'm thinking of doing this through Memphis Invest properties with Chris Clothier. The numbers indicate I can get better net cash flow and rate of return in that part of the country than in Seattle.

[Marco Santarelli]

Originally posted by @Account Closed:  

   
What would be the harm of comparing past performance and THEN making a decision if one will perform better or worse in the future, you know, SPECULATING? 
    

There is no harm, however:

• You cannot compare a cyclical market like Seattle with a linear market like Memphis.  They are different.  (That's apples to oranges.)
• Past performance is no guarantee of future performance.  Remember what happened to all those CA, NV, AZ and FL "investors" (i.e. speculators) back in 2006 thinking the party would go on?
• You can compare a local market's current condition to its past performance and try to deduce what it may do over the next year or two.  (I use tools to do this.)
• And, you can take the pulse of a market every 6 months to gauge where it might be going by following job growth, migration trends, major employer actions, affordability, etc.

I don't buy purely on appreciation potential.  It's a factor that plays into my decision making but it's probably fifth on my list.