This MIGHT workhttps://homeguides.sfgate.com/use-stocks-buy-renta...a 1031 though clearly excludes stocks.. 

Or should i flip the property and continue to roll the money into more properties and hopefully accelerate appreciation by improving the housing stock that is currently here?

They are equivalent in name only.The CRA (Canada Revenue Agency) only allows investments from RSPs in registered investment products (stocks, bonds and other registered products with OFSI). 

The potential partners I have been talking too also like the diversification of holding less stocks and the stability of real estate prices, at least in our are, compared to stocks also. 

This is my first investment property; up to this point I was all about investing in the stock market but I saw the light after reading Rich Dad Poor Dad!  

They only tax interest income, stocks, notes and such, a weird hybrid. stay away from FSBO and you’ll be tax free if your stocks and bonds are in retirement accounts. 

Don't underestimate the costs for the ROW permit and public improvements - you'll be obligated to do everything your property touches and bring it to conform to current standards, including alley if it's on one.Fire and sound separation codes are much stricter now than when much of our local apartment stock was built, so that's another thing to watch out for.

If it must be treated as cash out refi, can investing in stocks/bonds allow the interest to be deducted?  

The rental housing stock consists of many old up/down duplexes. 

I missed out on fantastic appreciation from 2013 to present because I was so focused on out of state (houston, memphis, Indy, San antonio, chicago, atlanta) investing.Just remember that real estate does not move fast like the stock market.