I think what you describe is pretty much standard performance for rental properties if your not paying cash and I am just assuming your putting max debt on them to try to get your return numbers into your criteria..

I always make sure that the properties are cash flow positive, but the large bulk of the money I make from them is from the other items (appreciation, debt paydown, tax benefits, etc). 

Probably not, but I felt better having that debt paid off. 

Your 1031 will have to be for the net selling price, not just the amount you clear after paying off any debt. 

If it's a matter of a quarter point but the more expensive debt is with a bank that offers better other terms like amortization and LTV, and they have a rock star loan officer, I'd go with the slightly higher interest rate product.2.)

There are buyers that prefer any combination.

The other option I potentially see is to partner with someone that has cash and/or better debt/income ratios and partner on the next purchase.

As you mentioned, it might be difficult timing the sales of each of properties where you can achieve a combined exchange (multiple properties into 1 property / or a few properties).Just a quick note that may be helpful - I work with a group of investors that can help with a combined exchange into a single property and will buy it back once you've found a replacement propertie(s) as the final destination for your capital.

This combined with minimum footage for a bedroom means many lofts do not quality in CA as a bedroomDifferent states will have different requirements for what constitutes a bedroom.  

The combination of OOS + S8 is toxic.