The problem is that the projections and assumptions are too rosy to make the sale.

And each former LP (now a tenant in common) can do a 1031 exchange on their portion. 

But, at one of the properties, the tenants split their portions of the rent.

What is your draw fee & benchmarks for the repairs portion of the borrowed money?

Let's say at 6% over 30Yrs will be about $960 per month(Principle/Interest) with the remaining  interest only portion $40K costing roughly $200 per month. $1500- $960 + $200 IS $340Cash in your pocket after everything roughly $1500-$1160-$340 which is not bad for a 100% financed deal(INFINITE RETURNS)Now, If you ran this analysis on a 1% deal as @Nicholas L. mentioned you will undoubtably end up in the red each month.All the best!!!

If you were in my shoes, what real estate strategy would you recommend for scaling quickly (but smartly) so that I can replace a good portion of the W2 income from real estate investing?

It seems a stretch to pay for the Rig with Section 179.I would have development equipment onboard and dedicate a portion of the space to developmentI could put the companies logo on the side as advertisementGiven this, what tax strategies are actually practical?

Consult with an attorney to provide a purchase and sale agreement in your respective state with an assignment exhibit included. 

I would try to portion that off as a separate loan that can be paid back quickly - you'd need to discuss your plan with the PML.

If the property sold today, after 1% cost of sale there's only $2.5 million in cash coming from that sale and that's assuming that there's no exit fee on the loan and no outstanding payables.