Your reinvestment target in order to defer all tax is going to be the total of the two net sales. 

Andre,The numbers you are quoting are awesome, however just because it is currently rented doesn't mean that there isn't a long-list of deferred maintenance items.

I have looked into hard money lending, as well as deferred mortgages to pull out the purchase price as cash.

Yikes.You can lead a horse to water, but if they won't drink, there's not much more to be done except be there later to help her out when she has to sell the propertiez for a song because deferred maintenance has sucked all the value and rental potental out.

Hello,Lets say you 1031 exchange into a new primary residence to defer 50k in capital gain tax. 

My question would be, if the numbers support a $1M purchase price and there is conservative $100K worth of deferred capital expenditures, do you write your letter of intent for $900K?

(this is tax deferred until you sell)b) monthly net cash flow (also tax advantaged; expenses and depreciation lessen the taxable income)c) I hope my market is appreciating.

I recently purchased my first investment, a short sale that has a good amount of necessary deferred maintenance.The heating system was cobbled together by a hack and needs to be completely replaced in the next few years. ($25,000)The roof is about 20 yrs old and is leaky  ($8000)The cement driveway and parking lot is in bad shape  ($10000)After taking out $500/month for miscellaneous maintenance costs, my monthly net is about $1500.Going forward, what are some of the best ways to finance these projects?

At the end of the day, it's about what you want to control vs. what you want to defer to others, and just how much it's worth (to you & the lender) to decide one way or the other.    

If they are renting 3 bedroom units for a $1800 rent roll that is indicative again of either a low income area or a house with a lot of deferred maintenance. 2 bedrooms on the other hand the area might be decent at that rent roll.If you have any questions at all on the local markets around here do not hesitate reaching out.Also, is your 20% down financing from a local mortgage lender here in Connecticut?