A friend of mine invested in one last year—apartments upstairs, a small coffee shop downstairs - and the combination of income streams made it a steady performer.Scaling with a 1031 Exchange:While not applicable unless you sell a property, planning for a 1031 exchange could help you scale quickly while avoiding capital gains taxes.

It's hard to harvest equity on these plays, unless you commit, long-term, towards very light leverage, as the only practical ways to benefit from the equity in your portfolio, if you plan to never sell it, only exchange it, for a lifetime, are to spend the cash flow, or cash out refi.

We sold a 2 bedroom condo in San Diego that would rent for about $2K (my daughter lived in one room, exchange students paid $1K/mo) and were able to buy 3 homes in Coos County via 1031.   

., deductions, 1031 exchanges), could potentially outweigh your current W-2 salary over time.Suggest a trial period for the first deal, involving him in decisions to build trust and confidence in the process.

The owner wants to sell for a 1031 exchange, and the property hasn’t been officially listed yet.

I have to agree that a 1031 exchange may not be the best strategy. 

A nice home that may some day make a bad rental but a good primary home An exchange in to a state without state income tax to save that 10% in state income taxes.  

(5 tenants are original tenants, having been in the homes since I purchased them 9-12 years ago when I was doing more buying.)My last purchase was a 1031 exchange in September of 23 for a new build. 

Keep in mind that accelerated depreciation increases recapture tax (taxed at up to 25%) upon sale, though this can be deferred with a 1031 exchange.

If this property won't cash flow as a long term rental, you might want to sell and 1031 exchange into a more profitable property.