1031 Multiple Lots into 1 or more Multi Family Property/ies

[Richard Benjamin Wilhite]

I’m about to list several vacant lots of land for sale. I hope to net around $800k after fees and closing costs. I want to do a 1031 exchange with the proceeds into one or more MF properties.

Assuming that I could get a property/properties at around $100k per unit, should I try to buy a single property of around 30-35 units? (With 25% down). Or should I buy several smaller properties? Or even 8 quads?

My current portfolio consists of 8 units, a fourplex, a duplex and two SFHs, in 3 different states. Some are self-managed, some are not. I hope to turn the self-managed properties over to a PM at some point in the first quarter of 2025.

I’d prefer to buy as large of a MF property as possible because of economies of scale and having to complete less transactions, but I haven’t closed or underwritten a deal that large before. So this is a concern I have.

Also, I’m unsure of the timing of the sale of my vacant lots and the gap of time in between closing. There will probably be 9 lots in total. So given the time constraints of a 1031 exchange, I thought I might have to buy several properties with the proceeds since there could possibly large gaps between the multiple closings.

I’m interested in hearing your thoughts and opinions. What else should I be working on in the meantime prior to listing the lots for sale to get ready for this sort of transaction?