You'll need a solid proforma and to build a team with expertise.

The only inconvenience is I have to pay booking.com a commission at the end of the month, and I have to remit the local taxes myself vs.

We pay payroll taxes and workers comp, we comply with state and federal laws regarding work place safety, PTO, vacation, labor laws et al.

According to our understanding:1) California does not recognize REP status, but we could claim it on our federal taxes, is this correct ?

A lot of lenders used to apply 35% for expenses, but in the last several years, the numbers for supplies, labor, utilities, taxes, etc… have increased significantly.Also take into account the age, occupancy and how has the property been maintained, this will affect the expenses too

That leaves $400 to cover taxes, maintenance, vacancies, etc.Now, let's pretend ALL your expenses come to $2,600 and you have $400 left over.

They would get that $500K tax free and the rest of the tax would be deferred in the 1031.A very elegant solution that puts $500K tax free in their hands now. 

Hey @Nick Gallon Martin, I recommend speaking to a Tax Planner/CPA, @Jeff Nash would be a great resource for you.

I don't know the answers on taxes, but New Jersey is the densest state in America.

At least, if you don't want issues down the road tax wise and if the government finds out it could cause some serious legal issues.