1031 of single family to multifamily with one unit as primary res

[William Latti]

My tenant is interested in buying a single family home that has appreciated quite nicely since our purchase. The numbers don't make much sense any longer as a rental should he leave or we were to refinance.  I can also avoid some of the realtor fees with him as the occupant/purchaser.  I currently am in a unique situation with Covid as I can work anywhere and am past the point of my current primary resident multiunit where I could again qualify for a primary residence loan.  My question is can I do a 1031 exchange from this single family to a multifamily, with one of the units in the multifamily being my primary residence to qualify for the lower interest loan with less than 25% down?  

[Dave Foster]

@William Latti, as long as the portion allocated to the investment was at least as much as the net sale of the SFR that works great. It gives you on site management and if you live there at least 2 years you'll be able to sell the building and take a portion of the sale tax free under the 121 primary residence exclusion. And you'll 1031 the rest into new real estate (hmmm maybe like a 4 plex that you live in part of etc etc). Great plan.