Im selling a LTR and plan to 1031. Gains are $180k, total equity is $300k. Have $400k in a general brokerage account that needs to move. Looking for cashflow as I recently took an exit package and dont have W2 income. A couple options Im considering:
1) Buy a $450k flip, put in $100k, rent long term for a few years, repeat. All cash. Have a house identified.
2) Buy a $1M quad - $600k down.
3) Buy a $800-$1M suburban home, rent & convert to primary in 2 yrs
Im 44, live in Denver, also own a STR

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Posting as :
works at
You are currently posting as works at

Buy the 4-plex

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Agreed

Im leaning toward the flip as it’s a block from my house and all comps point to a conservative $750k value once the work is done. I also have a strong GC that I trust to do work.

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What’s the sale price of the LTR you’re selling?

The problem with the flip is getting the money out of it. If you sell within a year, then the gains are considered ordinary income. I’m not sure how the deferred gains from the 1031 would be handled, but my guess is that you would owe depreciation recapture, which is probably more than the deferred LT cap gains.

How much rent could you generate post-flip if you turned that property into a rental, and how does that rent potential compare to the 4 plex? My guess is that the 4 plex would generate more rental income simply by being 4 separate units. Plus you get a bit of diversification having 4 separate tenants, which reduces the risk of vacancy across any single month.

Look at the MLG capital legacy fund. They seem to have a solid strategy. Take the distributions, which would be tax deferred. And I think there are redemption and liquidity options too.

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