So, what’s the trick?

The 1031 positions the investor into a property that the REIT absorbs as @Joe Sera said in the 721 conversion. 

Maricopa County ranked among the counties in the state with the highest number of foreclosure filings.

What is the interest rate on the HELOC?

Or just strangers off the street you met at a REI group? 

I've heard there's a good chance the mortgage company won't care as long as the payments continue to be made on time but I still want to protect myself just in case.

BiggerPockets is full of resources designed to help you along your journey, whether you are just getting started or a seasoned investor.

No it doesn’t, it’s just how he played the game back then.

I mainly want to ask if these assumptions are reasonable and if there's anything I haven't considered:(1) multifamily units in NJ close to New York City, ~$1,000,000, 20% down payment, (2) Using the following assumptions: 4% appreciation rate, 6.5% interest rate and 5.0% refinance after 5 years, $10,000 yearly maintenance fee(3) ~$6,000 monthly rental and assume 3% increase yearly with 5% vacancy rate(4) Based on the above, the calculated IRR if selling at the 10th year is ~19% (considering tax benefits) and ~17% (without tax benefits).

@Rey Magana look at the Mesa Del Sol area.