The front part of the property is a house, while the daycare operates in the back.The woman currently leases the daycare space and wants to stay, but the seller is looking to offload the property because he doesn’t want to handle the updates or renovations it needs, which are significant.

I will be updating them as I go along but it's just a rough idea of how the property cash flows

Finally, unless it is a duplex, you cannot claim losses from house hacking, period.

Electrical panel/updating wiring throughout house3.

Know the house and the finishes, if its out date stage it to look modern or make some renderings of the updates.

Is there any minimum period of time the first replacement property  needs to be held before using in a 1031.   

Anything can happen: the market can shift, we can go into another extended lockout period, the property can be destroyed by a natural disaster or by vandalism, the list of contingencies is endless.

@Jacky Peng I'm trying to convince my retired parents to do a garage ADU conversion out near SFO airport where they live so please keep us updated here on the forums, I look forward to hearing how this all goes for you and what other questions you have along the way!

If it’s strictly an investment, you may need to consider conventional loans or other creative financing options.Cash Flow Analysis: Do a thorough analysis to ensure that the rental income will at least cover your mortgage, property taxes, maintenance, and vacancy periods.

@Joe S. update your lease!