Check with a great tax professional!

I know California is still famous for clawing back the taxes owed eventually on a 1031, I don’t know if they are the only state that does it.

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@Catherine Javier If you find the property is more of a liability to you and ultimately decide to sell, the 1031 exchange would probably be the best way to take advantage of using the tax and find something with a greater growth potential.

I use Stessa for accounting, I love it, it links right to my bank account/credit card accounts and I can assign purchases to different properties and units of the property for multi-unit properties and at the end of the year I have a simple report to give my tax professional 

While they are beautiful and get you top dollar, many come with tax abatement that expire in 5 years and will significantly reduce your cash flow once expired. 

A 1031 Exchange is also known as the Tax- Deferred Exchange, which allows the different shareholders as well as different depositors to reinvest the profits that these people had acquired as well as earned, most particularly when it comes from the different financial transactions of the property that the investor had advanced without acquiring different taxes from the government.

While many of these issues are important considerations and should not be ignored or overlooked, there are other more crucial criteria that you must question and evaluate first.The critical risk criteria that you must review and evaluate prior to making your final decision on which 1031 Exchange Qualified Intermediary to retain includes, but is not limited to, the following areas:Technical capability of the 1031 Exchange Qualified IntermediaryInternal processes and audit controls to safeguard your 1031 Exchange funds and assetsUse of Qualified Trust Accounts or Qualified Escrow AccountsDecision criteria and guidelines for investment of your 1031 Exchange fundsProtection from potential errors or omissions by the Qualified Intermediary (E&O Insurance) Protection from potential theft or embezzlement of 1031 Exchange funds (Fidelity Bond) An experienced and professional 1031 Exchange Qualified Intermediary will understand these concerns and should be happy to discuss these crucial issues with you.

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