@Carlos Pena It just means that the property is held in a trust. 

Problem Situation:We currently only have one of the properties in a commercial loan and held by an LLC.

As long as the property is being held for investment use it qualifies for 1031 treatment.The use of a qualified intermediary is actually a requirement of the IRS. 

Hanging on to a property for any reason other than financial, is an emotional decision...or a bad poker move. 

-Do I need to establish a separate checking account if it is going to be held in our names for a few months before we rehab / refinance?

I would also recommend taking a look at how well the homes held up in value during the recession.

They don't require any reserves to be held in their accounts.

However, in NJ, while seller banks aren't generally held to the same standard of disclosure as other owners, the exception is what the law calls the 3 C's. 

In one such case from Texas, the jury held sellers liable for failing to disclose the existence of foundation defects revealed in a prior prospective buyer's engineering report, where the prospective buyer terminated the earnest money contract based on the report.”

There are two elements of taxable income when selling a rental property:Capital gainDepreciation recaptureDepreciation recapture is the process of "recapturing" prior depreciation taken on the property while it was held as a rental.