Seller financing, 1031 Exchange, Lease Option

[Aleta Coleman]

Hi all,

I'm considering selling my SFH rental property in Parker, CO via owner financing and 1031 exchange. As some of you may know, CO is currently in a HOT market and Parker continues to grow steadily as a suburb in the southern Denver metro area. My current tenants have been in the property since 2013 and their lease is up end of June, 2017. Current rent is $2100/mos., about $200 less than current market rents. However, my tenants rent is locked in until the end of their above stated lease.

I want to leverage some of the equity (approximately $130K-$150K) I have built up in that property in order to purchase and grow my RE biz and portfolio. I'm planning on meeting with an RE tax attorney about this when I go to CO next month, as I currently live in IL. Cash out refi and heloc are not seeming options at this juncture since I just officially started my RE investing business, am self employed (debt/income ratio) and I'm working on improving my FICO scores. 

Thought some of you more seasoned investors / experts could give me more insight on how to structure this and/or other possible exit strategies in this situation in order to reduce my capital gains tax?

Thanks in advance!!

 Aleta