The same type of property usage needs to be maintained to qualify for the 1031 exchange.Also, be aware of the time limits involved in a 1031 exchange.

Non-owner occupancy and business use affidavit are also important as usury limits in California are 10%.

Keri - you may also want to check into Fidelity - they have great bank account options - both business and personal - with $0 min, $0 fees including no wire transfer fee and no limit on the amount of money you can transfer. 

Provided your Sub2 purchase closing is done complete with all the necessary paperwork (e.g. limited power-of-attorney between the sellers and you), refinancing should be no different than a normal refinance.Sub2 can be heaven or hell, depending on the quality of your closing paperwork.

This exceeds the small claims court's limit of $10K. 

You will probably have some sort of limit regarding mold/medical, but thee things can turn into a mess, trust me, I manage a lot of units and have done so for almost 30 years. 

then the investors like myself are limited partner?

We also try to note everything wrong that is readily visible and then categorize each issue as:1) Health & Safety2) Property Preservation3) Marketing Negative Impact4) MiscellaneousThis can help owners make better decisions on which repairs to prioritize, especially if they have a limited budget.

Many of them have limited ability to understand value and scope of work because that's not their expertise. 

If you don't have water, sewer, and power at the property already, it will substantially limit how many units you could feasibility build even if 100% of the land was otherwise usable.