Refinance investment property or sell with a 1031.

[Jeffery Keith Hallen]

Newbie here. I inherited 4 rental houses in Austin Texas. Together Redfin says they are worth approx.2.5M. The houses are 2 bed 1 bath except one which is a 3/2 the rents are around 7K. The taxes are around 56K and the Insurance is 8K. These houses were where my father grew up along with aunts and uncles. All next door even. Thinking I should sell and reinvest with a 1031 but also hate to lose the family homes and thought about borrowing on the equity. My equity is 100% by the way. What would you do? Thanks. -Jeff

[Scott Wolf]

Originally posted by @Jeffery Keith Hallen:

Thank you everyone. I was talking to a Property manager/investor (not the one I am using) and he said the  properties could possibly squeeze maybe $1000 between them all and also suggested maybe investing  $40K each to remodel/ renovate with another bedroom and bath to get close to $3000 for rent. Sounds intriguing but not sure if it's worth it as I am sure the taxes would also go up. I do like the idea of doing a little bit of both -1031 and refi. Maybe that would be the best bet. Still got time to think about it I just need to find a private lender. 

Jeff, if you recently inherited the properties, you can most likely sell and not have to do a 1031.  This is due to you receiving a stepped up basis from when you inherited them.  It will relieve the time and property selection pressure of a 1031. Talk to your accountant or attorney about them.