Trading Up: Multifamily to Apartment Complex

[Macintyre Gallagher]

What exactly do you do when you "trade up" from multifamily homes to and apartment complex? I've read a bunch where people said they traded up and used the equity they had, does that mean they sell the multifamily homes and buy the apartment complex?? What are the actions of trading up?

[Corina Eufinger]

Taking a shot in the dark, I assume they are using a 1031 exchange.  Which in general terms they are taking the proceeds from the sale of the property they own rolling it over into the purchase of the second property, thus defering capital gains taxes on the profit from the sale of the first property.  

Consult an accountant for the specifics and how to effectively do it.