1030 Exchange vs LOC payment

[Rick Klopp]

Considering two options for an upcoming sale. Back story - I made a purchase of a SFR back in February for $5,500 (not a typo) that required significant renovation. I put it back on the market for $17,500 and just received an offer for $13,500 and accepted it. It's in an appreciating market and all I did was hang a "No Trespassing" sign and cut the grass once. Back to my two options - [1] conduct a 1031 exchange (not a huge amount and there are fees but every dollar counts) or [2] use the proceeds to pay down an existing Line of Credit running at 7%. I've ran the numbers several times and have come to a reasonable conclusion - just wanted to get some other insight. Thanks.

[Mark Creason]

A minimum holding period is not required.  The key is your intent.  If you buy and flip every property you buy, then will be hard to show intent to hold.  If you fix and hold everything, might have a legitimate argument that your intent was to hold.