1031 exchange - Sell in Bay Area and Buy in Sac Area

[Sayantan Satpati]

Hi, 

I am looking for suggestions on strategies for doing a 1031 exchange for my rental condo (1.05m value in the Milpitas Transit Area). Currently, the rent pays for PI/PT/Insurance. 

I plan to buy 2 properties in the Sac area in exchange for this one. Some of the possible ways I can think of are:

1. Buy 2 SFH in Roseville/Rocklin
2. Buy 1 SFH in Roseville/Rocklin and 1 Duplex in the Greater Sac Area
3. Buy 2 Duplex in the Greater Sac Area
4. Last option is to do nothing and hold on to my condo & keep playing the appreciation game

And then how easy it is to do a 1031 with multiple properties?

Looking for suggestions (and help with buying/managing if I decide to move forward) on what should be the best strategy given my situation.

Timeline: next 3-6 months.

[Carlos Ptriawan]

This was my problem before. Dave also teaches me so much about 1031. But I end up with cash-out refi for the following reason: If you sell your home, you will lose min. 8-10% as the sale cost anyway. A cash out will give you 75% of the house value. An entry Sacramento house is 350K (Duplex in Carmichael is 450k), so you will need $92K to purchase the house as an investment property. As long as you can pay that 25% of the down then try not to sell it. This way you will still receive appreciation juice from Milpitas house and the Sacramento house. The other trick is to have the duplex has a lease so the mortgage underwriting can use the income when calculating the DTI.

There're other strategies but this is the best risk/reward return, basically, just keep leveraging.