I realize I must hold onto the property for at least 5 years.Questions:I assume 1031 exchange is possible as in-laws qualify as an arms length transaction?

I realize you are close by geographically. 

I am starting to realize there has been a significant amount of consolidation in the space by private equity and other institutional investors. 3) From research it also seems like getting financing can be difficult without prior experience in the space.

They are more useful IMO for getting chunks of equity right off the bat thru value add and then either realizing that equity by flipping it and using for a down payment on something bigger or hold a couple years and then sell at that point to do that then. 

Now it's 45 days with no rent and you realize something is wrong.

It's really tough to start investing when you are 60 and realize in 30 years you'll be 90 (if you are lucky). 

@Mike Burkett I realize there was another Elite Funding.

I dont think the seller realized I was the lender either..

Had someone in mind who I thought would be great but he wants to add fees that I feel are unfair including $200 admin fee (on top of credit report fees) and mandatory 41.45 monthly for enrollment in their program which includes rental insurance and hvac filters, identity ins, and a few other little things.I've managed to keep costs pretty low for my tenants but realize I've been cheating myself. one is buying. 

I quickly realized that I was not destined to work in this type of environment for very long.