They have definitely become more challenging since rates have gone up.

Challenges?

A standard 1031 exchange requires that the same entity selling the property also acquires the replacement property, which becomes challenging when proceeds are split between partners.Potential Strategy: "Drop and Swap"One approach is the "Drop and Swap" method:- Convert Ownership: Before the sale, the LLC distributes the property to the partners, converting joint ownership into individual tenants-in-common (TIC) interests.- Individual 1031 Exchanges: Each partner can then independently conduct a 1031 exchange with their share, deferring capital gains taxes by reinvesting in like-kind properties.Considerations:- Timing: The IRS may scrutinize transactions where the "drop" (distribution) and "swap" (exchange) occur in quick succession.

Challenges?

Here's the challenge: If the numbers work with a low down payment, why wouldn't an investor putting 20%-30% just buy it and could likely offer more?

The affordability and cash flow potential are real, but so are the challenges.

What challenges did you face, especially when it comes to things like entitlement, zoning, and overall project planning?

The 45 days identification time sometimes presents a challenge and if you dont give yourself a little wiggle room you might end up buying something you dont necessarily want/like. 

It’s been an exciting (and sometimes chaotic) journey, and I’m always looking to learn from others while sharing my own experiences along the way.Baltimore is definitely a unique market with its fair share of challenges and opportunities, and I’d love to connect with other investors—whether you’re just starting out or have been in the game for years.

Challenges?