For our clients, we separate repairs into catergories: 1) Health & Saftey - highest priority to avoid lawsuits2) Property Preservation - don't want a $500 water leak repair to become a $5k repair later3) Government Required - for city & S8 inspections4) Marketing Negative Impact - who wants to rent a "purple" house?

I recommend buying into section 8 rental that have already did the modifications or repairs and passed the city inspection.

Checklist: Here’s a quick checklist to get you started:Get a home inspection (optional but recommended)Fix any outstanding repairs or issuesCreate or customize your lease agreement (covering pool/fireplace)Set up tenant screening processesTake detailed photos of the propertySecure proper insurance (consider rental-specific policies)Establish a move-in/move-out inspection processClarify utility responsibilities in the leaseConsider a property manager if you prefer hands-off managementDon’t worry, you're on the right track by doing your due diligence.

I feel like there's no way the renter could be expected to stay in the house while this is being repaired, but I don't know how this all gets remedied.

These improvements included updating key interior features, enhancing curb appeal, and addressing any necessary repairs.

I have all this cash in hand and I feel IRS is going to take a big chunk from it.I just did many repairs/improvements on the other property as write offs to help somewhat when I file next year.

Initially I told the tow company that they appear to keep a 9to5 type of schedule but recently my other neighbor saw them repairing cars in my driveway during the day. 

Looks serious to me, but repairable.

Once it's complete you take title and complete your exchange.Can I put about 30% down on the new investment property using the 1031 exchange then take out a heloc loan of 80% LTV and use that money to make repairs?

I occasionally get someone that says, "I know this one guy..." but they can't provide actual details and it's probably just a rumor.Almost all legal disputes are over security deposits and very small amounts.Large suits involve injuries, which are only a risk if the landlord is negligent (e.g. fails to repair a broken step and the tenant falls).Even if the landlord is guilty, the suit will most likely be settled out of court and covered by insurance.Even if it goes to court, insurance will cover the costs.The odds of a landlord losing a lawsuit for more money than the average insurance policy will pay are about the same as winning the lottery or being struck by lightning twice.