My husband and I are looking for a single family home to purchase as our primary residence. An ad for a home that looks appealing to us indicates: "Buyer to participate in 1031 exchange." I understand the basic principle that a 1031 exchange is a way for the owner of a business or investment property to sell the property and re-invest the money in a new business or investment property without having to pay capital gains taxes on the sale of the original property. However, what I don’t understand is what the risk, if any, would be to me and my husband were we to purchase someone’s investment property as our primary residence in this type of situation. Is it simply a matter that we would have to agree to be in escrow until the seller locates and purchases his "like-kind" exchange property? Or is there more to it than that?

I am a real estate investor and I was looking into getting a property under contract and setting up a lease option with a tenant buyer. Is it true that if the tenant buyer, fails to make the monthly payment, that I would not be able to evict them and I (Or the actual owner) would be forced to go into house repossession or foreclosure? If this is true, how can I protect my self, or what can I do to prevent this. I know people do lease options all the time, so this would seem like a big risk, if it was the case.