First condo: Trade up to multiplex or rent out

[Adam Conrad]

Was reading 7 Years to 7 Figure Wealth on this site and I'm at Year 5 - basically he takes roughly the same equity I have and trades up his 3 properties for a multiplex, that got me thinking about my current situation:

I got very lucky buying an undervalued property in a red hot market (South Boston) that has market appreciated over 42% in the last 4 years. I also timed my refinance perfectly, so my expenses are about $2100/mo while rents in my area go for in excess of $3200/mo. My property isn't the nicest, but I imagine with even $10k invested in my property I would further increase appreciation as well as increase rents to the median. $1100/mo cash flow for a 2+ bed sounds incredible, but I'm worried about a few things:

• South Boston is post peak. Housing prices are set to fall in 2018-2019, rents might level off/drop?
• My house has had structural issues in the past. We've had 2 structural engineers come out in 2013 and 2017 and have said things are fine, but it's got a serious grade heading toward the back of the house. Whether it gets worse or not, it's noticeable for sure, and could scare away renters.
• CapEx is looking pretty steep over the next 10 years. 10-15 to replace roof, likely re-side the exterior walls this summer to increase curb appeal and better protect the exterior walls. That alone would probably be $30k out of pocket for me over the next 10 years.

So taking a page from 7 Years to 7 Figures, I'm considering a 1031 Exchange: rent my current place to have it be considered an investment property, then 1031 to trade up for a multiplex. The problem is that when I look at most advice here, they advocate cash flows of $100-200/door, and for 4-6 beds in Boston $1200/mo cash flow would be great for a 6 bed, but that's basically the same as my current condo, with 3 times as many people (and x2 the units) to worry about...I guess that could be looked at as a hedge against vacancy, but what I'm getting at is:

My current property seems like a cash cow, but might cost me a bit in the future. Would trading up be smarter than making my current property great through forced appreciation and hold for the long term?

[Andrew Kerr]

@Adam Conrad a three unit where you could live in could be a cool property to trade up too.