Ordinary income rate all the way.Are these all bait and switch type listings, where they are offered at like 80% of FMV, hoping to be bid up?  

It's taxed at the same rate as your ordinary income, instead of the lower capital gains tax rates.

However there are some products that are single asset products that can be passive and act like a REIT yet retain 1031 eligibility.So sell and 1031 - total tax avoidanceSell and partial 1031 - partial tax avoidancesell with installment sale - no tax avoidance but tax is spread outgive you a NNN lease and option - no tax recognized at all other than ordinary income on lease payments.  

It would have tile or polished concrete floors (with radiant heat), and doggy doors to enclosed patios.  

Any other pet add-on advice is appreciated.They are smoking on the patio, also expressly against the lease terms.They are into organic gardening, which is fine, but has resulting in a bit of a swarm of fruit flies in the dining area.

Yes you would pay today the ordinary income taxes and the 10% penalty, but you would be putting that money to use in real estate and once you have held that account open for 5 years or more and you have reached the age of 59 1/2, then all distributions from there are tax free.

Would there by depreciation recapture to be taxed at ordinary rates with the Building purchase date of 3/1/1985 and depreciated over 18 year life? 

Votaw and Thompson are double yellow line two lane roads (I think 35mph the whole way), but are 99% residential north and south on Thompson as well as East and West on Votaw, with small duplexes and single family all along the roads, so having a driveway off the 'main' road there isn't out of the ordinary. 

So not all the benefits are for rental: you'll lose out on at least some of the gain exclusion, you have to pay tax on the rental income at ordinary rates, and you may have depreciation recapture upon sale which is higher rate than regular capital gains taxes, and you'll probably pay more mortgage interest over the life of the loan.

This applies any time you are searching in either a new geographic area to where you are currently investing, or looking at a different asset class.For example, if you own residential rentals in Los Angeles, and go to Anaheim to look at residential rentals, that is the same general geographic region and also the same asset class, so those expenses may be immediately deductible so long as purchasing new properties is a usual and ordinary business activity for you.But if you go look at commercial property in Anaheim, that is likely not immediately deductible since that is a new asset class for you.Likewise, if you travel to Omaha or Cleveland or Raleigh, that's a new geographic area and that travel is not immediately deductible.BUT - as soon as you buy that asset class or in that geographic area, you can tally up all your prior travel to that location and add the expense to the basis of the asset.