1031 Exchange Denver Metro Rental to ABQ or San Antonio?

[Nathan Thompson]

I have a 4BR/2BA in the Denver metro area that generates ~$2700 in rent by renting out by the room.  Bought for $380K in November 2018, but didn't live in it long enough to avoid capital gains taxes if I sold it. Based on comps, it would probably sell for between $500K to $525K. I'd sell through Redfin at 1% seller's agent fee because we bought with Redfin last fall, so I estimate 6% closing costs (not including holding costs and just need to touch up paint in some areas, but have new flooring, new roof, and recently upgraded electrical).  

I'm considering renting it as a SFH through Nomad (property management company) that can guarantee rental income for 2 years for a 5.5% fee and have given me a rental range of $2700 - $3100 ($2700 is the guaranteed floor, would be $2550 net). I can get a 3-year guarantee for 7.5%. Guaranteed rent is a minimum floor, but could go higher as leases are re-negotiated after a year.

Some numbers: 

Market value: $500K

Mortgage: $1760 @ 2.25% (VA loan)

Rental Income: $2700 / month

Cap Rate: $2700 rent * 0.5 expense ratio * 12 months = $16,200 / $500,000 market value = 3.2%

I'm considering selling and doing a 1031 exchange in one of two markets: San Antonio, TX or Albuquerque, NM. I have family and friends in both cities, so I'm in the area occasionally and would like to be able to tour properties before buying out of state. My goal would be to find a multi-family or potentially a multi-family and SFH depending on what I find.

My thought process: Cap rate is pretty low at 3.2% and I feel like appreciation will slow considerably and potentially correct as interest rates eventually rise, lumber costs decline for new builds, and homeowners start selling as covid fears subside. I think I can take some profits as buyers are overbidding (comparable home just sold for 8% over list - $40k over on a $500k home) and re-invest in a cheaper market with better cap rates. 

Long-term goal: Appreciation is nice, but my goal is to generate cash flow that can eventually replace my salary. 

Anything I should be thinking about that I'm missing? Anyone familiar with the San Antonio and/or ABQ markets that can give me their thoughts? 

Thanks in advance! 

-Nathan