Exchanging into a personal residence...?

Can I sell my investment property and then buy a house that I would like to live in?

In order to properly do a 1031 exchange, both your Old Property and your New Property have to be held for investment. This means that in most situations you would have to hold the New Property as investment property for at least a year and a day. Once this period has expired, you may do with it as you wish, including moving into it as your personal residence.