If you're not exactly excited about jumping back into the market, there Are passive investments that are eligible for 1031 exchange as well.

I have studied the market there for a bit now and am comfortable with investing with decent Cash Flow and modest property price gains.

They are going to be the cheaper alternative for SFR, so in theory you should get some decent appreciation gain and good tenant pool.3.

I have seen instances where a 1031 exchange was not required such as1) The overall gain from the sale of the investment property was very small or even negative2) The taxpayer had enough passive loss carryforwards to offset the gain.A 1031 exchange is a very powerful tool put it has to make sense before going forward.

But as I mentioned, IMO you dont loose a whole lot by having it and stand a chance to gain for little extra cost.

I gained some experience in being a general contractor by managing & working on some renovations on that other house.  

You make more when it's uneven and you can live in the smaller unit.Focus on the asset and the area, as long as you can withstand net negative or breakeven cashflow, and you will gain in appreciation.

@Eugene Lubman Selling the property to your parents allows them to generate passive income while enabling you to perform a 1031 exchange to defer capital gains taxes.

If you own majority and are able to control hoa which comes with its own headache and not totally passive that can help .  

(Net of capital gains tax and NOT including dividends.)