1031 into STR or invest in S&P500 from assets in IRR for elderly parents

[Philip Benavente]

Hello all,

I'll try and keep it short. I have been managing my parents properties ever since they couldn't manage them themselves. They are at the point that they need to move into and pay for their ALF. It's very expensive. Their income simply doesn't cover it. I am in the middle of raising a family and my contributions won't cover it either. 

Between them, there are two irrevocable trusts. each has an investment property (plus the property where they currently live). Since the properties are in an IRR, any investments into STR will be based on 1031 exchanges. Here is the rundown...

Prop 1: condo.. after selling it, should clear 360K

Prop 2: SFH.. after selling it, should clear 750k (after paying off 95k mortgage)

Prop 3: their multi-family, we would keep and after renting out their apt, it would be able to contribute to their ALF. 

My initial thinking is to 1031 exchange props 1 & 2 into STRs (or MTRs) since our focus would be cash flow (at this particular time). I don't have experience with STRs (or MTRs), so I would need a lot of hand-holding. I was thinking that this would bring in more than enough cash flow to make their lives very comfortable while paying for their ALF. I am also open to other markets where it would make the most sense. I would obviously need a property management company to assist. 

Or should I perhaps 1031 exchange prop 1 into an STR (or MTR), sell prop 2 - pay the capital gains tax and simply invest it into S&P500. Use the income and interest gains for parents?

Or simply sell both props and put it into S&P500? 

Unfortunately, keeping prop 1 & 2 as it is now, won't provide enough to pay for the ALF. 

Or would their be a better option that I am not thinking of? 

Thanks!!!

Phil