Posted by dealmaker on October 20, 2005 at 15:33:14:
Here’s a combination of what a friend from the Bay Area and I both did. He did an apartment building into 16 or 17 houses in TX. He manages them all and after a few years sold a couple to get some cash. He seller financed which got him out of cap gains and into ordinary income (although now cap rate is 15%, so he wouldn’t do it that way now), and it got him completely out of CA.
I 1031d a CA property into 3 TX properties, one my “designated” retirement home which I rented for two years before moving into, the other two were bought for immediate flips and I paid nothing to CA on any of it and got good interest on the seller financing.
My 5 year holding period is almost up so I can move out of here if I want to. The only downside is that the ppty I sold went up another $250K in the next two years while the 3 TX ppties COMBINED went up about $20K, and I didn’t benefit from most of that.