Note that each year you do the conversion it will be included as taxable income in the year you convert it...so be careful about converting a large amount that will push you into a higher tax bracket.I would be careful about deferring too much tax inside of traditional retirement accounts.

The items I mentioned can quickly sum up to $40,000 - if you can defer that cost to later it will help you to recycle all your money.

Purchase price: $150,000 Cash invested: $175,000 Old beat up Triplex in downtown Petoskey with a significant amount of deferred maintenance.

Upon my offer being accepted and contingent inspection, the amount of deferred maintenance revealed was so much that I pulled out of the deal entirely. 

@Scott Sweeney, You're thinking strategically and I'll defer to others analysis on numbers and outcomes. 

The amount of capX and repairs you'll have to do on a rehabbed property will obviously look very different if you're buying a property with deferred maintenance. 

Usually if it is multifamily there is a ton of deferred maintenance that needs to be taken care of first.

A 1031 exchange allows you to trade up in value of properties and defer (sometimes permanently) the taxes on that sale.

Do they have some deferred maintenance that you plan to take care of when the tenants leave?

(Unless you're in an extremely expensive market)Your description of the seller makes me think there is likely a large amount of deferred maintenance.