Investing in PV/Arcadia

[Sue Swami]

I have three rentals in the Gilbert/Queen Creek area. I am considering selling them all when their leases expire (within a few months of each other) and 1031 exchanging into a single bigger property in a more upscale area (as best as I can get timing right). I understand it's going to be less cash flow but it would save the headache of maintenance on three properties for me. Also, I think we're peaking prices in that area (a guess, who knows?)

I have been tempted by the tear down and rebuild wave that's happening there. I would be looking at a combination of proceeds from the sale and a new mortgage to pay for it. I'd be primarily looking for an older home under $1M that I could rent for a few years before rebuilding. The other possibility is to buy a lot and build custom and then sell it, but I don't believe I could get financing for $1.5M+, not to mention no income for about two years. Would be too ambitious I think but I just don't know any figures. 

What should I consider with such a project and with this area? It's newer to me, and I'd be diversifying away from the HOA/cookie cutter style rentals that we currently deal in.

1) In a quick survey of the two areas they seemed FILLED with for sale properties so is it right now a buyer's market there? Is it always the case that there is that much turnover? 

2) What kind of investments are best suited for that area? Flip? Buy & hold rental? How is the area as a rental anyway? 

3) Are there pockets within PV and arcadia that are better? I've driven around a bit, but I don't live there and could use some insight. All the realtors I spoke to are upbeat about everything (predictably). 

4) Are there other nice areas that anyone can suggest to consolidate at the $750k price range away from Chandler/Gilbert/Queen Creek? 

Thanks for any and all insight and avice.