I'm by no means an expert on 1031 exchanges but you can find experts on BiggerPockets if you end up needing them.There are a few other things that come to mind, I'll put them in order of most to least applicable based on the situation you've laid out.Offset any capital gains with capital losses - Maybe she owns some stock to use an easy example, and it hasn't done well. 

If you are making more than $150,000, your rental loss, if considered passive, will be suspended and carried forward unless you can claim real estate professional status.

If not, how much of a loss are you taking? 

., economic loss, insurance cost, or any other = line-item of OpEx for large multifamily in a given town, there are a number of statistical publications for me to reference.

Account Closed hi Zach do you know under what circumstances you can use losses to offset your W-2 income?

Since it won't be cash flow in this condition and may run into loss it may offset my rental income but hoping to build equity and have another investment in my portfolio.What would you folks suggest?

If you vet tenants properly, you will have few problems in any state, barring loss of jobs.

I do know people who have done it but they have enough money to take the loss if it should occur.

Yes, that's going to make it a lot harder to find a deal that works, but better to do that than realize you're underwater on something.And if you happen to expand your search and are open to Detroit, I'm happy to share more info on that market.Hey mate, we did the same as you guys when first starting and even ran it at a loss for many years.

I feel having a restaurant tenant will help to fill out the rest of the space pretty quickly if the food is good.Here is a link to the property.