Santa Ana six-unit: completing a 1031 move-up from four units to six

When we sold our returning client's Fullerton quadplex, the plan was already in motion: identify a larger replacement property and complete a 1031 exchange before the clock ran out. We represented them on the buy side for the upleg, targeting more units and stronger yield in a market we know well.

825 E Chestnut Avenue in Santa Ana fit the brief. A 1979 six-unit on a corner lot — four two-bed units and two three-bed units across 5,934 square feet — freshly turned with new flooring, paint, windows, sliding patio doors, a central water heater, and a roof only a few years old. Turnkey, pride-of-ownership, and priced to move.

We negotiated from a $2,275,000 list to a $2,220,000 close in February 2023, with $2,000 credited toward closing costs. At $140,950 of net operating income, the deal penciled at a 6.2% cap rate — a meaningful step up from the roughly 4.5% cap on the quadplex they exchanged out of, nearly doubling their in-place income while adding two units.

By coordinating the sale and the purchase, the client deferred their capital gains through the 1031 exchange and redeployed all of their equity into a bigger, higher-yielding asset. This is the payoff of the full round trip — buy right, sell into strength, and move up. (See the Fullerton quadplex acquisition and its sale and 1031 exchange.)