Whie DOS lender risk may or may not be high, being ininsured is... well, enjoy your 'asset protection'.

Even if it is only a 2 bedroom, great looking place.

Even if you take the $250,000 the realtor mentioned it would sell for as your basis that would mean you're looking at an $80k gain: 380,000 - (250,000 + 50,000 improvements) = 80,000Since you want to buy a nicer home for your mom, a 1031 exchange may not be applicable if the new property is intended for personal use, as 1031 exchanges are for investment or business properties only.

Even though I wasn't a good asset manager, I made money on my properties. 

It will just invite the idea of allowing her to include even more pets. 

Even tried craigslist and local paper once.

Even without those challenges you had, it was still probably hard to find a buyer because of the use mix.  

It will take that long to foreclose even if they find out.

Falling out of compliance can lead to penalties, lawsuits, and even damage to your reputation as a landlord.

There's a good chance it may not even appraise for what the seller is asking if the seller really is asking for that much more compared to others just for furniture.