Questions about BRRRR with a 1031 exchange

[Daniel Soovajian]

Hello,

Curious for BP's advice on my situation here...

I live in WA and have a condo in CT that's worth about $125,000. There's $32,000 left on that mortgage and I want to put the equity there to better use. I am exiting the CT market and plan to continue investing in TN for my next few properties. I haven't lived in that CT condo for 2 of the past 5 years so my plan was to sell the condo and purchase an investment property in TN via a 1031 exchange to defer the taxes and depreciation recapture expenses. 

I want to pursue the BRRRR strategy for my next investment property but am not sure how that would work with a 1031 exchange. Can I only use the funds from selling my CT condo on the down payment of the new investment property? Or is there a way to use the money from the 1031 exchange to cover my rehab expenses too? I don't think a 203k loan is an option since I won't be living at the new TN property, so what path forward allows me to make best use of the funds in the 1031?

Or could I put a big down payment (like 75%+) on the new TN investment property, complete the BRRRR with my own funds from outside the 1031, and then refinance to pull the $ out for the next BRRRR?

Last question: going forward, would these type of questions be best suited for a CPA with real estate experience or are they too technical on the 1031 side and I should consult with a 1031 facilitator for advice? 

Thank you!