@Joseph M.It's so funny (and actually sad) when I keep seeing postings about investing Out of State when there is no consideration to the future rent appreciation in the location where you are planning on living for the long term.I had a friend who purchased 3 multi-family buildings in Bristol, CT in 2004 but lived in Manhattan renting at the time an apt for $2k a month.The 3 buildings he bought gave him a total cash flow of around $1k per month.Today, 13 years after he bought those buildings, I think there was some rent appreciation but it was very minimal.

Basically, a FLIP funded with income-producing RE passes on net income (rents) initially and then, at a point that you specify when you create the trust, the trust will 'flip' to paying you a flat rate of income based on the trust's total value.

The 1031 has some hoops to jump through in the form of a 45 day identification period and a total time frame of 180 days. 

-CapX: $180List Price: $400kDesired Purchase Price: $360kDownpayment: $72kAnticipated Rehab: $10kClosing Costs: $2,88030 yr loan @ 7% ( the middle ground between FHA and hard money)Total Cash out of pocket: $84,880Annual CF (before taxes): $7,127.15ROI: 8.40%So the insurance, repairs, closing costs, and rehab costs are all estimates.I tried to get as close to actuals as possible though.Please let me know what you guys think.I’m open to all advice and criticism.Thanks BP!

That makes their total gain around $790K made up of depreciation recapture at probably 25% and capital gain at 15%. 

It is totally untrue that the rental unit would have to be left vacant for the remainder of the lease. 

Here are some details:Mortgage owed upon inheritance - $50,000Buy-out my brother - $45,000Renovations - $20,000Total Cost - $115,000 (I took out a home equity loan as the property was worth $215,000)Total Rents - $1,575Total Expenses - $1,400 (Mortgage, Insurance, Taxes, Property Manager, Cap Ex, Maintenance, Vacancy)Net Income/Month - $175Good deal for me!

If your total profit plus depreciation taken is greater than $32K then you will still have a savings from the 1031. 

We lived in MD for 20 + years and I was a total Real Estate Junkie while there.

We set aside about 60% of our total savings into cash reserves for investing.