Normally in a 1031 exchange that $500K would be taxable beause the IRS sees that as taking profit. 

Happy to exchange companies to avoid if it would help.And to answer @Michael Smythe's question, I interviewed the crap out of management companies with what I felt were great, in-depth questions, both times we hired bad managers.

I could also begin to exchange some assets out of CA to NV if the opportunity should arise.Just my 0.02

Hoping to know more tomorrow on timing as i'm hoping to use this as a 1031 myself as well.

Given your expertise as a contractor, you might find an investor willing to fund the rehab in exchange for a profit share or interest on the loan.Cash-Out Refinance:If you own other investment properties, consider a cash-out refinance to pull equity from those properties to fund the rehab.I work for Aslan Home Lending and we have a HUGE variety of loan products, including the ones mentioned above.

So my parents are doing a 1031 on their old property to buya new one.

@Bryan Leon, these are questions you are best asking the 1031 intermediary you will use for the deal.

1031 exchanges are a powerful tool for real estate investors.

I'm not expert, but I'm planning to do my first 1031 in six months, so I've been planning and doing my research like crazy. 

My husband and I would like a 20 to 100 unit and I will be helping my mom sell her Hawaii single family investment house and 1031 it into a more lucrative multifamily investment to at least triple her income.