Gains within this account are tax-free if rules are followed, but avoid prohibited transactions to maintain account integrity.

It's not as passive as most people would believe. 

I can already hear the pushback in my own head: "real estate isn't passive!"

Would love to revive this post in hopes of gaining more info.

I’ve focused mainly on Florida but have also looked at options in Sacramento and other slightly more remote locations in CA.While I’m familiar with value-add strategies (ADUs, renovations or storage rentals), these seem like heavy lifts for modest gains.

I will continue my due diligence process and you both have helped me gain more confidence with my decision to start working with Praxis.

If you qualify, you can use passive losses, like those from depreciation, to offset your active income.

The cons as i see it include loosing the 2 of 5 year cap gain exception, typically not an ideal rental because the emphasis at purchase was buying a good home for your family and not a rental with optimal return (my ex-home consistently has the lowest cash flow for equity in my RE portfolio), not disconnected enough from the property causes addition angst on damage and may result in over improvement.  

If winds are 100 mph then you lose air support while embers gain massive trajectory.

Future gains on the investment portion may be deferred with another 1031 exchange, while gains on the primary residence may qualify for the $250k/$500k exclusion if residency requirements are met.This post does not create a CPA-Client relationship.