If you don't do a 1031 exchange, you’ll owe tax on the portion of depreciation claimed, even if the sale price is close to the original purchase price.

Here’s a breakdown of my numbers:Primary Residence:Estimated Value: $340,000Remaining Mortgage: $187,000HELOC Balance: $76,000 (fully utilized)Remaining Equity: $77,000Rental Property #1:Estimated Value: $110,800Remaining Mortgage: $60,000Equity: $50,800Cash Flow: $375/monthRental Property #2:Estimated Value: $215,000Remaining Mortgage: $115,000Equity: $100,000Cash Flow: $350/monthOther Income:$1,500/monthMy DilemmaI'm considering taking out a Home Equity Loan (HEL) on my primary residence to:Pay off the HELOC (eliminating the variable rate risk).Use the remaining cash for a down payment on another rental property (~$150K purchase price with 20% down).Estimated cash flow: ~$150/month in year one.Alternatively, I could save up for the down payment instead of leveraging more debt.

It assumes the property is Class A - which not a lot of investors are acquiring these days.Here's some copy & paste info about property classes:_____________________________________________________________________________Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Quote from @Jason Reider: I've been in the process of purchasing a duplex and all along the seller's agent has been pretty much unresponsive to mine.

I’m in Ohio, so I can purchase a property with $40k cash out, invest $10k in repairs, and rent for a couple hundred above the monthly operating costs.

@Thomas FarrellRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

I just purchased a duplex and it is listed under a single address.

Mortgage Balance: $430,000 Monthly Mortgage Payment: $3,100 Current Rent: $4,100/month (below market rate, planning to gradually adjust it during yearly renewal to eventually catch up to the market rate) Appraised Value: $900,000 (purchased for $657,000 8 yrs ago) Managed by a property manager Loan assumableProperty B: Located in VA.

I recently purchased 2 vacant lots in KS.

These properties were purchased for investment only purposes (they are not second homes/duplex’s etc).