@Amy Healy The power of a 1031 exchange is that you are able to leverage your entire gains and upgrade to larger propery, newer property, or better located property.

Too many tenants will tell you a rental is perfect, then they move in and start demanding you upgrade appliances, paint the walls, replace the flooring, add a deck, etc.

Now there are some improvements (kitchen remodel, bathroom remodel, upgrading windows) where that flips on its head, but it's still something to really plan through. 

To evaluate investment prospects, including positive cash flow, potential for appreciation, and value-added upgrades, do a full property study.5.

If you want to stand out to our BiggerPockets community, please use code VENI324 to upgrade at 20% off!

Unless the rules have changed - and I don't think they have in the last year or so,  you can buy in the same market if its an upgrade, or 50 miles out.

The improvements upgrade their property and could benefit a future Tenant. 

Account Closed Given the seller is willing to finance 70% of the purchase price of $1.8M ($1.26M) that means you need to come up with $540,000 + settlement costs, reserves and a budgetary number for repairs unless the property does not require any improvements or upgrades.

Interior and Exterior Upgrades; Modern Appliances, Tiling, paint, etc...What was the outcome?

For this particular rehab with a gross of over 70K, I sent him an email introducing myself and included a list of everything we had done, noting the upgrades as compared to the neighborhood without talking numbers.