I'm in a similar position except I'm a little older (46) and I will not have any pension income in my future.* So I'm a little envious
The trick for me is converting investment RE equity into reliable cash flow.* I like your idea of moving the equity into multifamily instead of SFR.* I think in many markets multifamily will outperform SFRs, kind of a reversal of the last 5 or 6 years.*
Things to consider:* where is your area in the cycle for apt bldgs?* are you willing to invest at a distance if your area is not in a favorable part of the cycle?* what loan-to-value can you achieve after you 1031?* where is your area in the cycle for your SFR?* are you willing to relocate to a cheaper area if need be?* can you get reliable income from your second home or would it be better to sell it and invest in a multifamily propty?
Like me, you have some money tied up in retirement accounts.* I'm inclined to keep it until I'm 59.5 and have a boost down the road.* I believe the SEPP withdrawals allow you to take 1/30 each year out of your retirement accts without penalty.* Others will know a lot more about this than me.*
It looks like you can have $1,135,000 (minus selling costs) in investment RE equity by selling your personal residence and allocating 200k of that equtiy to the investment side and using your second residence (either by renting it out or exchanging it into rental propty) for income.*
If you assume 6.5% mortgage rate, 50% LTV and CAP rate [(Income minus Expenses) divided by down payment] of 6.5% your cash-on-cash return would be 5.4%.* So the $1,135,000 would yield $61,517/year.*
If you do the SEPP thing (others help me on this one) with the retirement accts I think you can take about 9k annually w/o penalty.*
If you can find a house somewhere for 200k, your can live mortgage free.
So that's roughly 70k/yr with no mortgage.*