AVI Homes Duplexes in Kyle - 1031 Exchange Question

[Isidoro Leon]

Hello BP Community, I currently own two fourplexes free and clear in south austin that were built in the mid 1980s.  The area has been getting rougher in the past 10 years but probably still Class C and all (2/2) units have had new HVAC units installed in the past 1-2 years.  However, I can see things continuing to break down and needing replacement just due to the age of the units.  I am considering a 1031 Exchange for some new 2 level 3/2 AVI Home duplexes being built on the north end of Kyle on the west side of I35 with new restaurants, medical offices, retail stores etc being built in the same immediate area.  These duplexes are listed for 377K while I'm 'guesstimating' each 4Plex will sell for approximately 825K.  The units in the 4Plexes rent for 1400 while each side of the new duplexes will probably rent for about $2300.  If you are familiar with the Kyle/South Austin area, any input you provide on whether to proceed with a 1031 Exchange (or not) would be highly appreciated.  Have a Great Day!  

[Rosa Regier]

Hi @Isidoro Leon!  I believe the price of $377k is per side making each duplex $754k assuming both sides are the same. You'll be trading gross rents from your current $5600/quad for the new $4600/duplex. Going from a 1980s neighborhood probably means that you don't pay any association dues. It's possible that you'll have to pay them monthly in a newly constructed area.

The 1031 exchange is a great vehicle as Dave stated and I plan on using that myself. Best wishes.