You get to charge the one tenant above-market rent (in exchange for them being allowed to sublet), the lender gets the one single lease that they know how to understand, everyone wins.

My interest in the US market is perked because of the stronger dollar, and better tax benefits (like the 1031 exchange).

You want to keep paying cheap rent but get an A-class rental in exchange.

I am considering a 1031 Exchange when we decide to "move up" in home in the future.

I have a condo in Los Angeles that I plan to do a 1031 Exchange within the next year.

Equity extracted is taxed deferred until sale and can be extended further via a 1031.  

It's currently valued at about $95-$100k.Should I sell the property & 1031 into another "nicer" multi-unit in a better neighborhood that will certainly cost more & likely not cashflow as well?

Since a 1031 exchange is time sensitive I can't risk not selling all three together.  

@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.

-1031 into something else?