Best opportunity for 1031 money?

[Greg Schow]

I have some 1031 money to put to work (about $2M). We won't close on our sale until end of January, so we have till around mid March to identify properties. We've looked at many options and prioritize them accordingly:

1) We'd love to invest in private deals (multifamily, self storage, mobile home parks). Due to 1031 restrictions we can't usually do syndications or Funds.

2) Individual rentals - We could roll this into 10-20 individual home rentals (love the appreciation, like the cash flow, hate the complexity of 10-20 individual homes/insurance/loans etc.)

3) NNN leases - This may be the simplest option to park a lot of passive cash, however with approx 5-6% yields it seems like the market is undervaluing risk in retail/hospitality/restaurants (where most of the NNN lease deals reside).

I'd love any other thoughts people have. We're open to splitting the cash between a few of these strategies. Thanks for the suggestions!

[Taylor L.]

Look into Tenant In Common arrangements. 1031 Exchanges aren't completely locked out of syndications. I discussed this with @Dave Foster at one point. I think finding 10-20 good rentals in that timeframe is going to be difficult. I would agree that the market probably hasn't adjusted to the risks in retail. You could look to buy something with value add potential, but it might be tough to do that under this time pressure and if it's your first time on that type of property.

I'd look at Tenant In Common arrangements with syndications.