Selling a rental house and a vacant lot. What to do with the cash.

[Joel Schiffer]

After sales i'll have about $300k.  I'm experiencing analysis paralysis.  If I want to save ~$60k in cap gains tax i need to 1031 into something.  Or, should i just pay the tax and throw it into the S&P500?  I figure over 10 years that's only 2% a year in taxes.  1031 isn't a ton of savings spread out.  People here advise against paying all cash for a house but at the moment my market has negative cash flow on rental properties at 20% down.  Should I buy a nicer/newer primary residence, rent it for 24 months, and then move in to satisfy the 1031 requirements? s&p 500? or some other strategy?