That’s the best bet.

I bet you heard but the market around those areas are booming right now, especially since it is a buyers market, it gives you an advantage to get better deals from sellers while people are continously moving there, especially for jobs like tech, logistics, etc. 

The buyer got an affordable home in exchange for doing the repairs himself (sweat equity), I got a cashflowing note, and my private lender got a steady interest payment.

Quote from @Marcus Ball: After struggling with local rehab properties in California, I switched to build-to-rent developers and chose a 1031 exchange.

From there, I would like to consider a 1031 exchange in the future to acquire more units.My current property management company suggested that they could handle a mid sized apartment building but I would absolutely not consider them for it as I believe they have overextended themselves and communication is lacking.

I like this, bet on the jockey more than the horse kind of situation.

I think long term it can make sense especially if you can 1031 exchange into something down the road.  

If they have money and can compete on pricing, brokers will be the best bet.  

So yes you can exchange it to save capital gains taxes on $266k plus 19 years of depreciation recapture.

And easy for us to fulfill 1031 exchanges now.