Sold Florida STR - 1031 or Cash Out???

[James Thompson]

Looking for advice on best strategy/next step following sale of a home we owned in Florida as an STR.

Background: Sold 3bed/3bth home, have approx $600k equity. Funds currently being held by QI. 

Option 1: 1031 into another STR, target price $1.1-1.4m. Would want min 3 bed/3 bath, located in FL/TN/SC/NC/GA. Either close to water/beach, or in scenic/mountain area. Have always owned homes but would consider a condo with an amazing view or unique features. Familiar with FL and have been looking in Tampa area, Naples/Ft Myers, 30A, Space coast, and Jacksonville areas. Numbers in FL are not looking great with insurance/taxes/HOA fees/etc for cash flow but willing to focus more on just breaking even (or close to even) and having significant long term appreciation.

Option 2: take the cash, pay 20% long term capital gains and wait as market continues to dip for a prime buying opportunity.

Would greatly appreciate insight/advice from those much more experienced and knowledgeable than myself. Thanks in advance!