I would interpret* this information as they were threatened with foreclosure but did not actually end up foreclosed.

It seems like it could be interpreted as such, and then I'm taking an awfully big risk. 

And the second question is your interpretation of where that particular property in that particular place is heading.  

There lack of interpretation of the code and constant hold to exceptions and over emphasis on unnecessary portions of the code etc is frustrating beyond belief.

Here is my guess at where you are mis-interpreting.  

Oftentimes when the number of rooms and amenities are the same and the square footage is within 20%, difference in total price ends up being only around 25-30% of the unrealistic difference found by multiplying the smaller home's price per square foot by the larger home's size.Regardless, your Realtor doesn't have a whole lot of comps to compare to as we all see the same sold data, so it isn't entirely his fault for not picking a perfect price, but rather a missed interpretation of adjustments somewhere. 

You may interpret that as you like.

The IRS interprets the difference as you pulling profit out.Jason's idea of keeping the 1031 and then refinancing to use the refi cash to invest in a syndication is a great one. 

Some interpret cash flow as property income while others consider it after deducting financing costs.

Sounds like a good demand to me but I'm open to hearing how others interpret the data.