They generate between 5% and 7% depending on the currency exchange.

The properties I'm buying are part take down properties in a 1031 exchange.

Then you can do a cash out refi to purchase or a 1031 exchange which I think Tammy might have been referring to.  1031 exchanges are a way to avoid paying capital gains up front a sale.  

I have had this problem for a few years and have been 'saving' those tax loss for future year when I sell properties to reduce capital gain instead of 1031.

All my clients are selling at 4 to 5 caps and buying out of state doing a 1031.The Iranians and Chinese are buying many of these properties.

I received a great document from @Bill Exeter on 1031 exchanges.  

You really,really need to educate yourself on the entire wholesale process before you get other people involved with you.I would strongly recommend you sell your lead to an experienced wholesaler in exchange for a 10% percent finders fee and more importantly,an education.Make them bring you to the negotiations and demonstrate how to professionally conduct business and with the right tools to get the job done.

In scenario #2 you don't have at least 1 yr of stable income.My recommendation:* Scenario #1 - Sell the SFH and do a 1031 exchange into a upscale multi-unit.

Either way, would be great to exchange ideas on the area!

Ok, now that you have taken your initial step, below are some quick links to get engaged. http://www.biggerpockets.com/starthere http://www.biggerpockets.com/ubg http://www.biggerpockets.com/meet Setting up Keyword Alerts How to Use @Mentions on BiggerPockets 25 Tips for Real Estate SuccessREI can be very daunting, but, before you go searching for that 1st buy, please take a few minutes to bone up on the tips in link below.http://www.realestate.com/advice/buying-your-first-investment-property/ However, this site thrives on interactions and as such we encourage two way exchanges and look forward to educational and thought provoking ideas relevant to REI.