Some of the things I would consider are: - the ROI & IRR of each option - if I wanted the cash now to reinvest or rather a steady stream of income to offset the monthly debt. - how the profit would impact my taxes I haven't done seller financing or a lease option but I would go the seller financing route.

You must consider the concerns and safety of your good tenants (I trust you have a rental agreement in place with them) as well as how you will attract good tenants to the property for the empty unit.Have you seen the movie "Pacific Heights"?

I think a smaller, steady stream of cash makes more sense for me, and ultimately should require a significantly less time (managing) than flipping would.My company owns a 7 unit industrial property, and I manage a 10 unit commercial property so I am somewhat familiar with the overall landlord role.

It's nice having an income stream rolling in on a flip deal.

My goals over the next 10 years are to create a mostly passive income stream of $40K annually through investment, have fun doing it, and to support other local small businesses.I am very impressed by the community on this forum and can't wait to learn more from folks here.

He sells his lots all over the country with seller financing and makes a nice income stream.

Often times the stream banks are not at the same elevation.

Two properties with 100% financing (none of your own money invested) that cash flow can be a nice income stream in the future.If a 1031 exchange will get you into one or more properties that will increase your cash flow, then go for it.

This same thing happened in the movie Tommyboy.Seriously though, I would check to see if the deeds were properly notarized and if the grandpa was in his right state of mind when he signed it.

In other words how strong and who is guaranteeing the lease and payment stream?