1031 Strategy: Sell first or find replacement property first?

[Todd Young]

I first posted this in the Buying and Selling Forum, but I think it is better suited to this forum as ya'll are big multifamily investors. 

I'm ready for my first "Big" 1031 exchange. I've done several 1 for 1 exchanges, trading a SFR for a triplex or a duplex for a fourplex. But now I'm wanting to up my game, upgrade my clientele and get a 30-50 unit complex. This is uncharted territory for me so I would love some advice from people who have done this.

Here's what I'm selling - I have a portfolio of duplexes triplexes and fourplexes - 7 of them that I'm ready to sell. They are all value-add plays that I've improved, and increased income. They are mostly in the Everett area of Washington with one in Marysville one in Seattle. I've had two different residential multifam realtors give me CMAs for each property and the portfolio is worth about $6.3mil, of which I should net about $2.6Mil for my down payment.

So far, I've had a couple commercial brokers out scouting around looking for a deal for me in the 30-50 unit range in South Snohomish County in the $5mil - $10mil range. So far they haven't found one and I'm getting conflicting advice from the brokers about how to go about this.

One says I should wait until I have my replacement property identified - since that could take a while - and then list the small properties once i'm under contract, making the deal contingent on the sale of those properties. I'm pretty comfortable with this tactic. as I'm nervous about running up against my 45 day identification deadline.

One says I should list my 7 properties as a package deal, I might net a little less (5-10%) but the benefit of closing everything at once and being able to snag a deal on an upleg is worth it. Furthermore he says I should market and sell my properties first without having any replacement identified because no seller is going to take me serious, or want to tie up their property with a buyer's selling contingency.

When I did a 1 for 1 exchange it has always been kindof easy, I was usually able to find a buyer and a replacement property at the same time it seemed. But this twist of trying to sell 7 properties is tricky and stressing me out!

What have you done? Have you sold multiple properties to exchange into a larger one? If so, did you list and sell your properties first or wait until you identified a replacement? Did you sell your portfolio as a package? Or am I better off listing them individually?

Thanks! Todd