Spend what’s needed to upgrade with reliable mechanical systems, roof that doesn’t leak, remediate all mold; interior design modernized; in other words a place that will attract a higher income no hassle tenant.  

----------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

You can take any proceeds tax free and roll into a different investment. 

You rent it for one year and create a successful STR business that shows a trailing 12 month net income of $75,000.  

Then rent the bigger home out using a property manager, allowing her to possibly cash flow and maintain that asset and let it continue to grow in value.Encourage her to consult with a CPA or tax attorney to explore the best strategy tailored to her situation.

If 1031 is to be implemented it must be done on the property level.2. 1031 generally does not apply to IRAs since they are tax-exempt. 3.

Despite the equity We also want to take advantage of tax advantages we did stay in the property for 2 years !  

Through proactive maintenance, efficient tenant placement, and careful financial management, I optimized rental income and ensured a steady cash flow.

@Kyle LipkoRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Have we tried asking him if he is interested in steady monthly income backed by real estate?