If you are setting aside funds for capex, taxes, insurance, or other expenses that don't occur monthly, transfer those funds to Savings each month and hold them there until it's time to spend them.

A 1031 exchange would use all of the tax in the purchase of your next property.

The land is on two tax lots so my plan is to sell the extra lot immediately after closing for a projected $275K.The property on the other lot will be a fix and flip with projected costs of $240K and an ARV of $750K.I plan to use a PML of 2 points and 12% APY for 70% of the total cost.

I would recommend an STR for the best tax benefits and cash flow no doubt.

Worse case I just continue to manufacture them through my fix-n-flip business and buy with seller financing where available.Also, is tax lien investing really viable today? 

It is how it is recognized, taxed and falls heavy on the VOE. 

Can provide all the benefits from a cash flow and tax perspective.

You might not cash flow right away, but even just offsetting what you were paying in rent while building equity, getting tax benefits, and learning how to be a landlord is a game changer.

@David R Pustelnik recommend you first focus on raising the rent for the first time in 10 years.By the way, how much have your property taxes and home insurance gone up since this tenant moved in?

Thanks again for your input, and I'll probably reach out as I get further along in the process.Hi @Edward Zachary Samperio, the regulations aren't that difficult and I'd be happy to give you a quick rundown about the density limits, hotel occupancy taxes, permitting, etc.