It's not possible to do a 1031 exchange retroactively. 

I say this to say my contractor, who we know and love, is interested in renting the basement in exchange for upgrading the basement that way I can rent the basement and upper level to get more cash flow.

While considering doing a 1031 exchange into a Delaware Statutory Trust (DST), I read that upfront costs for a DST can range from 10% to 18% of the invested equity.

Seller financing does not (in general) work well with 1031 exchanges. 

You can sell that property as the trust and buy as yourself or as a "disregarded LLC"(an LLC that you are the only member of and that also does not file it's own tax return.In a 1031 exchange, the taxpayer for the old property must be the tax payer for the new property. 

They can also use 1031 exchange to defer taxes.I am not saying we should not consider tax when we do investment.

I would love to join in on any BP groups that do OOS deals  (I have proven time management, attention to detail and paperwork organization skills in exchange for getting to learn alongside some REI masters). 

Except that in 30 years, you will have accumulated more depreciation to return.There are strategies like 1031 exchanges that can be applied whet it is time to sell.

Since I'm new on this platform, I realize that many on here do the conventional "fix and flips" - those aren't eligible for 1031 exchanges.

You could also consider combining your Section 121 exclusion with a 1031 Exchange (if you can identify a property in time).