This way you can "milk" the asset for a few years and defer improvements to the next owner.

Hello,I currently have 3 properties under contract in Griffin Ga.1) quadraplex at 60k, fully occupied at 390 per month 2) single family at 18k, occupied paying 4253) single family at 19.5k occupied paying 500The properties are in decent shape, if anything maybe 3k in deferred maintenance on each single family, (probably needs new roof, but could also be put off for a couple years if needed)I have owned another property in the same town renting at 850 for five years, so I do have some experience but I expect this deal to be much more management intensive, (different income bracket and therefore different tenants)Financing: Getting a "bridge loan" using equity in the rental I currently own to provide the downpayment. 75% LTV6% interest15 year term3-year balloon good relationship with the bank (small community bank)Expenses: 1800 a year in taxes across all three properties I still need to get a quote but budgeting for around 2500-3k in insurance (conservative estimate)principal and mortgage payment: 900 per month Bottom line: 2485 in gross rents, around 1300 in PITI, so 1185 net per month before maintenance and vacany (which I'm struggling to quantify)Seeking any advice: I've talked to other investors in the area who have large numbers of these houses, and they say to count on spending around 2k per house whenever someone moves, but at the same time they have tenants who will stay for years at the time as long as rent is kept at or slightly below market (which all of the ones I have under contract are).I have no illusions about what I'm getting into, I am intimately familiar with the demographic that rents these houses.

It can be deferred under soft market conditions to conserve cash. 

If I 1031 exchanged into a condo on a land-leased property, once the property reverts to the land owner would I have to pay any deferred taxes on the relinquished property sale?

I'm sticking to simple numbers to focus on the rules for a minute.I guess writing that out helped me get to my question: is there anything in the rules that would not allow me to borrow more than the purchase amount in a transaction that is partially paid for with a tax deferred exchange?

I was hoping I had other options to defer my capital gain tax.I guess there aren't any for my situation...

@Michelle R.Why would you take passive rental income taxed at a low rate and switch it to services income upon which you will pay a higher rate of tax including self-employment taxes, in order to defer that into a retirement plan?  

@Cody Wilhite, it's not a loophole but if he can exercise some patience he can take $500K of profit tax free and 1031 the remaining profit into new real estate thus eliminating the tax totally through a mix of tax deferred 1031 treatment and sec 121 primary residence sale.He needs to be willing to hold on to it as an investment for a year or so and then sell.  

In order to defer all tax you would still have to purchase at least as much as your net sale (your% of the net sale) and use all of the proceeds (again your % of the proceeds).  

Capital attracts capital.Further, if you fall into hard times or something goes wrong, you can get all sorts of deferments with student loans that you can't with other forms of debt.Or, you can take the middle path.