You can expect turnover costs, losses due to vacancies, and other expenses.

All in one closing so the costs are minimal. 

My duplex - built 1989, 2,060 sf, 2 bed/bath, 1 year old roof, value if I subdivide (county already approved) and sell each separately $150k each ($300k total)Investor duplex - built 1995, 2,300 sf, 2 bed/bath, 5 year old roof, value around $310kThe investors initial request was for an equal trade and they would pay realtor fees, which I replied wouldn't be equal due to buying/selling costs (recording fees, title insurance, closing fee, survey, inspections, loan fees, 1031 fees, accountant fees, repairs), taxes would increase due to new sale price, I'd trade a 3.75% mortgage for a higher one, and I'm on the 10th year of a 30 year loan so resetting that to a new loan would restart amortization and pay more towards interest.

We got started, but they hired an appraiser and charged me $750, while typically appraisal costs around $500.

Private lending using retirement funds is my personal favorite (I've done a few dozen loans like this) for the following reasons: passive, low risk, and high returns.

They reason why they would do this is to get $4 million, and they won't have to foreclose into a bad resale market. 

Reverse 1031 Exchanges are more complicated and have higher costs, but can solve these problems. 

P.S; We live in Wilmington NC so both markets would be "long distance" P.S.P.S there are no reasonably priced multi family properties local to us.

It will only create unnecessary hassle and cost.

(aside from the 1 or 2 homes that have stunning overlook views).When building out your buy box, are you all using the averages, or are you basing your min/max on the cream of the crop listing revenues, even when there aren't clear reasons as to why they are performing so much better than others?