So, if you 1031 into an asset worth $700K or more to fully defer taxes, you'll have around $240K or so to put down (there are fees and deductions so these numbers are general). 

These include depreciation and all expense deductions. 

Assuming they passed all requirements for the deductions, what's the chance of an audit?

Your taxes are the same whether you're doing business with or without an LLC.Also, your own labor, as in doing work for your own projects is not deductible, with or without LLCs.

The warranty company takes its time accessing the situation, and then they tell you there is a deductible; they only cover so much that you need to use their preferred company, which will take three weeks.

And if I do pay taxes do I get to deduct my original expenses from the LA sale?

Tax benefits, including depreciation and mortgage interest deductions.

We have come close to filing eviction many times.We do have a clause in our rental agreement that helps protect us from short timers, if it is legal in your state:After additional deductions for cleaning and repairs necessary to restore the premises to its original condition (less allowance for reasonable wear and tear), along with deductions for any rent due (including rent loss during periods of restoration), late fee, caused inspection/eviction, utility, notice, legal and any breach of contract costs, the balance of the security fee shall be refunded pro rata as follows: 10% of the remaining balance for up to one month of occupancy; 20% for two months, 30% for 3 months, 40% for 4 months, 50% for 5 months, …and so forth until 100% for 10 months or more of occupancy; 

You’re on-site for maintenance issues or tenant concerns, which cuts down on the hassle of traveling to a separate location.Loan Accessibility: Getting a mortgage for a duplex can be easier than financing other types of investment properties because you can use the potential rental income from the second unit to help qualify for the loan.Tax Benefits: Owning a rental property can open up opportunities for various deductions like mortgage interest, property taxes, operating expenses, and depreciation.Disadvantages of Investing in DuplexesPrivacy Issues: Living so close to your tenants means less privacy.

You’re not making new deductions, you’re simply pulling them forward so you have less deductions in the future.