This benefit allows the owner’s estate or heirs to receive the property at a new, higher basis—reducing capital gains taxes if they choose to sell the property after inheriting it.In short, partial disposition allows tax deductions for retired property components during ownership, while the death step-up basis resets the property’s depreciated value, providing tax relief for heirs.

Hey @Dalton Foote - I highly suggest  using a renovation loan and house hacking a multi-family if that is possible with your current life circumstances.The 203k and homestyle renovation loans are just amazing products and drastically help you reduce your risk, in my opinion, because you are able to leverage the cost of the entire renovation with such a low down payment loan.We work with a lot of clients who use these products in Chicago, and no matter what, in the long term, they gain great equity.If you aren't able to house hack - the process is essentially the same, but just with more money down with hard money or conventional construction loan.

@Fulati PaerhatiA 1031 exchange is a powerful strategy to defer capital gains taxes and grow your rental portfolio.

Consider the "2 of the last 5 year rule" to avoid capital gains. 

By adopting the house-hacking method—living in one unit while renting out the others—we plan for the tenants to cover the mortgage and gain valuable property management experience.

For example, let's say you are guaranteed a 7% pref and the property delivers exactly that, but then sells with a capital gain. 

So I just wanted to present the raw facts, hear everyone's opinions, and obviously gain some knowledge and tips from investors! 

Living in the worst unit each year and fixing it up-- the equity gain is just going to be phenomenal.

I’m in CA also and paid cap gains on huge profits to the tune of 28%, which included CA state cap gains.

A deal killer has nothing to gain from telling you it's a bad deal.