I offered to help you however you mentioned you self-manage, (terrible idea) and " have a rolodex of handymen" Well why are your handymen not being your local agent? 

You mention for option 1, that the equity in one home is what you'd need to pay the HELOC off, but that the HELOC payments are 25% of the revenue...give us actual numbers. 

Something turn-key is typically going to be sold at market price (unless you can find a deal off market as you mentioned).

For example, I mention that every adult must pay a $30 application fee, pass my credit/criminal background, make a combined income of 3x the rent, and whether or not the property accepts pets.

You mentioned this is your second home—are you treating your first home as an investment property now that you're moving into this one?

@Mark Dutton Responses continue to point to being overleveraged but you only provided the debt amount, you never mentioned the value of your portfolio/collateral or market characteristics.

He mentioned in his post how he spoke with three law firms and none of them agreed with his asset protection approach and was looking for referrals for someone who would agree with his strategy.

Like Account Closed mentioned this gain is made up of two parts - capital gain and depreciation recapture both taxed differently.The 1031 will be a powerful tool for a planner like you. 

Under property management costs, usually just the standard 10% of monthly rent is often referenced but the lease renewal costs & tenant replacements costs are not mentioned quite as often.

Paul, I'd also like to mention that doing a 1031 for $75k of long term capital gain is pretty iffy.