She is going through eviction proceedings right now according to public records.

I’m trying to keep from paying state income tax in the proceeds of the house. 

It's not passive-aggressive to say: I legitimately regret making a vulnerable post asking for encouragement, only to be met with an expert bashing me for mistakes I've already enumerated and taken responsibility for and measures to fix; and offering me advice I've already taken to heart.

My condo is located close to a university and apartments in that area mostly cater to student population.Condo has been on the market for 14 days. No leads so far.This is summer where most of the students are either o...

Assuming I had the experience, I would only buy a place with structural issues if I had 1) an experienced and trusted structural engineer telling me a clear, and verifiable explanation of the cause(s) of the problem and a viable and affordable solution, 2) trusted and experienced tradespeople who would be implementing the solution (carpenter, mason, etc.) confirming with me that they could fix the issue (with 90% or higher confidence that the issue could be resolved within budget), and 3) confirmation from city inspectors that the issue (and an inability to fix the issue) would not result in condemnation/revocation of occupancy permits. ...and even then, I'd only proceed if I had the cash reserves to ride out a major series of unexpected problems (e.g.; time overruns, budget overruns, unexpected revocation of occupancy permits from the city, etc.) 

not sure how to proceed.

Any proceeds from the sale of the note can be added to the 1031 exchange account to allow for more tax deferral.

If I am, you don't have capital gains, because you used all the proceeds from the GAINS to purchase a property. 

My goal is to start wholesaling and put the proceeds towards fix and flips and buy and holds.

Do you have a plan for the proceeds?