Sales Price:    $250,000.00
            Loan:           $ 50,000.00
            Proceeds:       $200,000.00
            Basis:          $ 50,000.00
            Gain:           $200,000.00

   Tax Rate at 40% combined federal and state tax
   
SALE                                           EXCHANGE
Tax due: $200,000.00                         $      0.00
         x       40%
         ___________
         $ 80,000.00

Cash available for reinvestment:
         $120,000.00                         $200,000.00
        
I. MAXIMIZE GROWTH AND LEVERAGE
Acquiring a property with a 25% down payment
Value:   $480,000.00                         $800,000.00
Loan:    $280,000.00                         $600,000.00
Equity:  $120,000.00                         $200,000.00

II. MAXIMIZE CASH FLOW
Acquiring a property of equal value
Value:   $250,000.00                         $250,000.00
Loan:    $130,000.00                         $ 50,000.00
Equity:  $120,000.00                         $200,000.00

Income less debt service:
Rental income at $2,000.00/month
Loan at 10% amortized over 30 years
Income:  $2,000.00                           $  2,000.00
Debt:    $1,140.00                           $    438.00
Net:     $  860.00                           $  1,560.00