I prefer to hold on to it and create the passive cash flow through renting, though what you describe does make sense for long run. 

I got mine free but they may have a smaller fee.From that you can make an offer, if there are costs to obtain clear and insurable title deduct those from your offer and describe the liens that need to be cleared by you at settlement.

In Florida, for example, if you were doing what you describe you should be collecting taxes and sending them to the county and state. 

Actually that describes me, and a lot of the other people on this website.1.

You describe it as a duplex or triplex, depending on how one interprets what you wrote.

The 1031 will not work with what you are describing.  

Hey Simon,I'm building a tool that does pretty much what you describe, to automate what I'm doing in spredsheets.http://www.reikit.com/compsIt uses zillow/google maps data for lookups, but I use it with my own comps that I got from my realtor, then I run my own adjustments to get an accurate ARV.It's still early days, but check it out and let me know what you think.  

I would describe this property as urban camping or a youth hostel for adults.  

@Jason JonesI have to step in here and state that a Rollover as Business Startup (ROBS) plan does not align with your situation as you have described it at all.Those plans are for actively running a business, not holding passive income properties.This is a complex and expensive solution, and a great tool for certain situations and significant amounts of capital.  

This thread is another advantage of becoming an agent/broker as I have the advantage of having the need for the appraiser to call me for access to the property to do the appraiser which gives me the opportunity to offer "assistance" with comps and/or provide a list of upgrades@Lynne Jacob  What you are describing is loan fraud by not disclosing the second lien.