I also know that doing a 1031 exchange will enable us to carry all of the proceeds from the sale as a deposit on a new property.   

@Patrick Irish based on what you say, the Sec 121 Exclusion and the 1031 Exchange both seem like they'd be good options for you to defer capital gains on sale of the townhouse.Sec 121 Exclusion has 3 requirements: First, Determine whether any of the automatic disqualifications apply (acquired property through 1031 exchange in last 5 years, or subject to Expat taxes)Next, meet the ownership requirement -> you owned the home for at least 24 months (2 years) out of the last 5 years leading up to the date of sale (date of the closing)Finally, meet the residence requirement -> owned the home and used it as your residence for at least 24 months (or 730 days) of the previous 5 yearsThere is no “Wiggle Room” but there is a Sec 121 “partial exclusion” for people like you that missed the residence requirement by a few months.

with the intention of doing a 1031 exchange on that property and the goal to utilize Brandon Turner's "stack" method to dump the proceeds into a bigger property with more units in a similar market within Worcester county.

A 1031 exchange, an installment sale, and a Delaware Statutory Trust (DST) are just a few.

Tough to beat this answer from @Michael PlaksYou can also check out these two recent posts that walk through Section 121 Exclusion and 1031 Exchange guidelines and strategyHow Section 121 Exclusion and 1031 Exchange works: https://www.biggerpockets.com/forums/51/topics/1195208-1031-and-sec-121-experts-want-to-sell-rental-but-tax-worried What not to do if you don't meet the requirements for Section 121 Exclusion and 1031 Exchange:  https://www.biggerpockets.com/forums/51/topics/1195383-5k-for-cap-gains-tax-opinion-quote-that-reasonable ...

I had signed up for a 3rd investment at a very early stage for another 400K thru a 1031 exchange.

Can some of the members of an LLC do their own exchange or cash out at the time of the sale of the property?

You can message me on the BP messages so we can exchange some contact info.

depends when you sell. talk to a 1031 expert. what matters is intent. if you bought it to sell for profit then yes you'll pay your normal tax rate. if it is for investment and you can prove that you can 1031 exchange

.: @Jonathan GreeneThat's exactly what I was thinking all through the crackpot initial person exchange in your thread.