Fullerton quadplex to a Santa Ana six-unit: a 1031 move-up

Two years after we helped this returning client acquire the Knepp Avenue quadplex, they were ready to take their gains and trade up. This time we represented them on the sell side, with a clear mandate: maximize price and time the sale to feed a 1031 exchange into a larger building.

The renovated, stabilized building did its job over the hold. Gross scheduled income rose from $93,000 to $102,600 and net operating income climbed from $63,541 to $74,943 — an 18% lift — which strengthened the story we could tell buyers on income and location near Cal State Fullerton.

We brought 225 W Knepp Avenue to market at $1,650,000 and closed at $1,550,000 in February 2023 — $120,000 above the client's 2021 purchase price of $1,430,000. With roughly $375,500 down at acquisition (about 26%), that appreciation alone worked out to about a 32% return on their down payment before selling costs — a clear example of how leverage amplifies returns in small multifamily. Because the timing was coordinated with their replacement purchase, they rolled the full proceeds, tax-deferred, through a 1031 exchange.

Those proceeds went straight into a six-unit building in Santa Ana — trading four units for six and deferring the capital gains in the process. The Knepp Avenue round trip, from a 2021 acquisition to a 2023 sale and move-up, is how we like to work with investors: buy right, operate for income, and exit into the next, larger opportunity. (See the original acquisition case study and the Santa Ana six-unit they exchanged into.)