My only add is to the replace your wife's income part.

So, you either need to plan the repairs into your operating expenses so when it's time to repair/replace something you're prepared or you need to repair/upgrade at your entrance in order to put much less away per month for CapEx.If you need a CapEx calculator or a cash flow analysis calculator check InvestingTE.

Let me replace “school district” with zoned school or catchment.

And after you have sent 15k on downpayment and closing costs, you have 10k left, which is just enough for one HVAC emergency replacement and some paint. 

It turns out the machine was allowing free washes, and with a replacement part should be back up and running. 

So I'm thinking a good target will be around $30k/month to replace both of our incomes and live how we want to live, respectively. 

We hope that you can remedy the situation so that we can move into a habitable home.Suggestions that we have to fix the issues:Hire a company to rip up the carpets, treat the subfloors, and replace the carpets, at least on the main level and on the stairs.Provide an air purifier as a start to remedying the smell.Replace the garbage disposal.Hire a plumber to fix the draining issue in the bathroom sink of the smaller bedroom.Fix the tiles in the upstairs bathroom so they no longer present a safety hazard.Replace or fix the screen doors.Fix the gap between the windows and the walls in the living room.Hire a professional company to treat the entire home for pests.

So there might not be enough gain to need a 1031 exchange.If there is enough gain to justify the 1031 exchange then simply treat your replacement property as you would any other investment like @Daniel Osman said. 

Replacing bulb???????

I'm interested in learning about rental property investment, looking to build a rental portfolio, exploring real estate investing to replace my income.