You typically have two years to find property that must have a similar use: Our friend @Bill Exeter has a great page detailing this type of exchange: http://www.exeter1031.com/1033_exchange_faqs.aspx#howSection 1033 US Tax Code(B)Period within which property must be replaced The period referred to in subparagraph (A) shall be the period beginning with the date of the disposition of the converted property, or the earliest date of the threat or imminence of requisition or condemnation of the converted property, whichever is the earlier, and ending—(i) 2 years after the close of the first taxable year in which any part of the gain upon the conversion is realized, or(ii) subject to such terms and conditions as may be specified by the Secretary, at the close of such later date as the Secretary may designate on application by the taxpayer.

If they don't, move along.Do not pay for conversation and consultation but be willing to pay for implementation of the entity structure and associated documents (articles of incorporation, etc)If either you or your son own other businesses consider an S corp.

My gut feeling is you will find it is only zone as a duplex and no permits were ever received to allow the conversion to a tri-plex.

So I can't be very helpful in this conversation other than to try and drag in the guys that'll know: @Phillip Dwyer , @Robert Adams

Scott, just didn't say it, sounds like the contractor is playing you, I hate that.I try to have a little conversation with a new contractor in asking for any bid.I'll mention I'm in the business, I give a general scope of work, in doing that I mention some of the steps involved, just to let them know I know.

The duplex seems like the best choice (not only for COC returns, but cash flow is higher, and also for other reasons discussed earlier in this conversation).

Loft condo projects can have pre-sold sales, a warehouse conversion can take over a year, even two.

Have never had this type of conversation with a tenant nor will I ever need too.

A different logic is required.Have you ever heard of micro conversions?

@Dion DePaoli @Ali Boone I thought to make it possibly easier I would bring some hypothetical numbers in to this conversation to see what the cost of running a multi family unit would be for Canadians or foreigners.If we have a multi family property with a gross income of $40,000 a year, taking the %60 rule from podcast 47 we have $16320.If I am getting this right from this $16320 IRS will want %30 on worst case scenario which will make our profit $9792 and then the Canadian Gov. wants to take certain percentage.is there any other cost I am missing out on and is this the correct way of calculating the cost?