Money talks and BS walks.

I have seen many investors lose money due to purchasing site unseen.

But. you'll have to see what your net gain is before you can see if you'll save any money with your 1031 exchange.

If you can solve their problem, you can usually buy the house.When you are a new wholesaler, the best thing you can do is to get some reps calling and looking for another wholesaler in the area, before you put your own money down on it.

If you move your expectations to keeping some money in, but refinancing out as much as you can then you'll be set up to not be let down from the jump.

How do I go about finding those who'd rather just collect the insurance money then sell it off at a discount?  

Do you have money set aside?

. :) A zoning change can take up to 6 months, approval isn't guaranteed (despite Aldermanic support), and potentially cost a lot of money (architectural site / floor plans & dimensioned elevations, zoning attorney, holding costs, etc.) 

I allow pets and charge a pet rent of $35 a month, its nice bit of extra money and pet owners tend to stay longer as tenants.

I would spend the money to meter the units separately.