The property that you sell and then purchase through a 1031 Exchange must be held for rental, investment (capital appreciation), or used in a business. 

Or am I barking up the wrong tree?

this is regardless of furnished or not.if you do not get rid of the tenant, the situation will degrade.  

I think another trick is, can you get a mortgage or is it an all cash deal?

I would recommend buying a standard SFH with opportunities for an ADU, or a split floor plan where you could rent out the rooms!

These properties will have very few or no upgraded amenities, and rents will be below market.

@Rey Magana Welcome to BP.You didn't mention what kind of investing you are interested in.Is it singlefamily or multifamily?

Always introduce yourself as ..John or maybe Reagan is better....Maybe like hi I'm Reagan like the President, your friendly neighborhood realtor....that's how they will remember you and you want them to remember you. 

Post questions to learn or create discussions.

To become a true business owner or investor, you need to leverage your time through others.