The 1st position loan is paid off but has a second position heloc on the home with 50k balance.

Once the construction of the business building was far enough along (but no more than 180 days) that the price of the land and the amount of improvements you make on it are equal to the sale of your old investment property you take title to it and that would complete your 1031 exchange. 

Prepare financially by saving for down payments, improving your credit score, and setting aside emergency reserves.

What I do see is that a strong screening process improves your chances of getting a responsible resident. 

Many improvements may qualify as Qualified Improvement Property (QIP) and can be written off immediately rather than being capitalized.A question that investors ask a lot is if they should perform a cost segregation study before or after a rehab.

A good manager can improve performance for a mediocre investment; a bad manager will kill a good investment.

It’s their home.

IT can definitely be improved from an ROI standpoint with metered and reassigning all utilities, charging for laundry, renting garages to tenants, renting storage space.I own a portfolio of duplexes and single family properties that are doing well. 

They may argue they couldn't pay you because they just made a $10,000 improvement to the house. 

In 1-2 years you could save enough to purchase a home to house hack.