- very low remaining mortgage balance!!

It's rare that you'll find a good seller for #1, so the only option remaining is to document the condition from the day of purchase.

Historically REITs in US have outperformed the sp500 for last 50/40/30 years by 3-4% a year, but they have underperformed sp500 in the last 20 years due to Quantitative Easing induced liquidity stock inflation.

The (2) remaining apartments are vacant and will need some work to be livable. 4.

But in reality you might just want to think about using a standard savings account And taking a hit from inflation on the cash because the delta from the higher interest account to the regular account is not really that much on small amounts.

Yes this leaves more money in the deal but it reduces my risk and ensures I can remain profitable in a down market. 

in what I just laid out, you'd make monthly payments to the seller just like you would to a bank for 5 years, and then the remaining principal balance of the loan would be due, at which time presumably you would refinance the house into a commercial mortgage and use the proceeds to pay off the seller. 

The exchange entity must remain the same, meaning the ADU ownership should mirror that of the relinquished property.Construction exchanges require improvements to be completed within 180 days, and the total value must match or exceed the property being sold.

I am from Iowa so our goal would be to use it in the winter months (dec,jan,fab) and try and break even off the income from the remaining months. 

These regions offer affordable prices for most investors, with homes that are turnkey—either newly constructed or fully renovated, tenant-ready, and with systems that still have 10+ years of life remaining.