Rely on the experts for each aspect without crossing over their respective expertise. 

I too love the debt free idea, however I do also respect the fact that leveraging was the key to my build as well.

They say that RE companies that claim to provide leads really only have weak web leads that have a very low, almost zero conversion rate.Any help or info with respect to these questions would be appreciated:1). 

This is his choice which I respect.

We want to be responsible, knowledgeable, and skillful people, someone worthy of respect even if society doe not recognize out contribution. 

But if they don't respect it, then that seems to be their problem, not yours.

I would assume that military tenants are more respectful renters but that is only an assumption...

Thus, If the property is transferred after the 2 year period and/or if 1031 treatment is respected even if distributed before that, we really dont care about when 5 year starts in this case. 

I effectively paid little for the illegal units when I brought the buildings (say $200 PSF), but the square footage is good, they have respectable enterances, decent light, amenities, etc. so it’s worth the hassle of dealing with the city.

Both alternatives allow for the property to cash flow respective to their rent roll.Any guidance would be greatly appreciated, thank you!