If your basis is $2M and you clear $5M after selling costs you’ll owe somewhere between $450k (all capital gains tax) and $750k (all depreciation recapture.).

Didn't know this was a thing, you learn something new everyday :)

They are ~55-60, and they actually just inherited it, so the basis was just reset.

I assume it has to do with 1031x and/or LTCG, depreciation, and a step-up in basis at death, yes?

It's generally a useful tool for an investor who is estate planning and has a step-up in basis event on the horizon and can liquidate out of the REIT easier than out of the traditionally held property. 

I would rent out the Nevada property then later on, leave the Bay Area and move into the Nevada home to semi-retire (work on a part-time/contract basis) - there's no state income tax whereas California is taxing all my income, including rental income from my Indianapolis properties.

I'm entirely STR focused as an agent as well, and work with pretty much exclusively STR investors, so I have my finger to the pulse of the regulatory environment here in a county, city, and even neighborhood basis.

Navigating the mortgage landscape can be complex, but I am dedicated to making the process as smooth as possible for you.Looking forward to connecting with agents and investors sharing some of the experiences we face in the industry on a regular basis!

We're doing these mortgage planning meetings on a daily basis.

You also want to look at your liquid reserves because as you buy more rentals more PITI reserves are required and a Heloc can "Never" be used as an asset or for a PITI reserve.If you evver have any questions feel free to reach out I enjoy talking REI and I deal with them every day as  Banker.