However, to my understanding, a 1031 conversion of an investment property to your primary residence after a safe harbor of two years does not trigger a tax event.

 I have been researching and browsing through bigger pockets and different real estate investment info but haven’t pulled the trigger on anything.

A 1031 exchange doesn’t apply, but funding through a self-directed IRA can defer taxes, though profits from debt financing may trigger UBIT.To reduce taxes, consider forming an LLC for better expense deductions, offsetting gains with investment losses, or holding the property for 12+ months to qualify for lower long-term capital gains rates.This post does not create a CPA-Client relationship.

One of the other factors that kept me from pulling the trigger is that the city has never passed any real STR regulation.

They use leverage in some of their funds, which can increase returns, especially if they have a low cost of capital (but potentially increase risk and trigger UBIT issues).

Quote from @Penny Wilkinson: How are appraisers approaching value on multi-family when there are extremely limited comps available?

You have three choices...transfer the property and keep the loan in tact hoping they won't trigger due on sale, refinance into a loan that allows it, or simply leave things as they are. 

This property gives me significant income, so losing it would be an extreme loss.

So brainstorm the different options then pull the trigger!

Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.Make sure you understand the Class of properties you are looking at and the corresponding results to expect.The City of Detroit has 183 Neighborhoods we’ve analyzed.DM us if you’d like to discuss this logical approach in greater detail!