SPECIAL RULES FOR SECTION 1031 LIKE-KIND EXCHANGE TRANSACTIONS, page 135 states:". 01 Taxpayers are provided the relief described in this section if an IRS News Release or other guidance provides relief for acts listed in this revenue procedure (unless the news release or other guidance specifies otherwise)..02(1) The last day of a 45-day identification period set forth in § 1.1031(k)-1(b)(2)(i) of the Income Tax Regulations, the last day of a 180-day exchange period set forth in § 1.1031(k)-1(b)(2)(ii), and the last day of a period set forth in section 4.02(3) through (6) of Rev.

Even PS blowing up is not really news, it was expected.

While I hate to be the bearer of bad news the latest email to hit my inbox (yesterday) was titled: [Walk Through] We flipped this property for $200K....  

San Diego’s average house hold income is about what you stated, but the median is a surprisingly low (considering US news and world report lists it as the most expensive US city) ~$100k.  

The good news is that these properties can indeed be purchased for various investment strategies, including rentals, BRRRR (Buy, Rehab, Rent, Refinance Repeat), or fix-and-flip projects.Purchasing as a Rental or for BRRRR:You can acquire a Freddie Mac home to hold as a rental property or implement the BRRRR strategy.

Right, but how do I deliver the news that their lease will not be renewed?

It is good news, indeed.

That's not to say you can't do well there, but I'd encourage you to look at Belton and Temple (which can also be very rough and block to block) rather than Killeen.The good news is that there continues to be serious population and job growth in the area.  

Your source is Fox News...

The current owner is usually not be very inclined to give the news to the tenant out of concern that the deal does not close and they have to deal with the vacancy.