You may also need to show STR rental history on these properties from the previous owner if you are looking to qualify using short term rents.

That is a very unique situation that no other contractor would ever offer you, so IMO, given your circumstances (assuming you are able and qualified financially and won’t be house poor) I would take your buddy up on the multi construction seminar.

I would like to add what qualifies you are a short term rental investor that can take advantage of this "loophole" below: The short-term rental (STR) tax loophole allows property owners to classify rental income as non-passive, enabling them to take advantage of certain tax benefits even if they don't qualify for Real Estate Professional Status (REPS).

Now I have equity locked in and couldn’t qualify for a heloc due to credit as well.

You have 60 days before you have to put this money back into a qualified plan.

Does anyone have experience or insights into what qualifies as an "Artist Dwelling"?

I did speak with a property manager in the area and their biggest challenge in Pueblo is finding qualified tenants. 

The Qualified Intermediary that you select to support the Exchange is important and price is just one of the factors to consider.Happy to make an unbiased recommendation if you’re looking for more options.

-sourced, it doesn’t typically qualify for the FEIE, regardless of where you or your wife manage the properties.  

First, you will be stuck with tenants that have very few options, so you are likely going to be accepting less qualified tenants on various fronts.