I currently own three rental properties and a primary. 

I'm going through a divorce a determining whether I want to buy my spouse out of our primary home or sell it and split the proceeds.

Honestly if you are never planning on moving back to the house (or the area), you are not going to cash flow especially after you add in insurance, repairs and maintenance (assuming property taxes are part of your mortgage).You have a friend willing to buy it off market-double check fair market value and sell it to them.My understanding is I would pay zero in Capital Gains because it was my primary residence and I lived there for over 2 years.

There are 2 mini splits per unit- one in the primary and one in the living area.

Those aren't the primary factors. 

To me, this is something you would just buy as a unique primary residence, the only issue would be if you needed the income to qualify.

I don’t own my primary home outright.

I will have the primary bedroom with an attached bath.

The other comments are correct though, being completely devoted to your primary business is probably best.

Has anyone ever done a 1031 exchange from an investment property into a primary residence or is this even possible?