My parents own a portfolio in Central Oregon (Bend/Redmond) and due to the “political agenda” you mentioned they’re wanting to 1031 their properties over into Idaho. 

Dont know why anyone would want to own rentals or do business in California.. it's set up to bend u over.

@KC Conti I have rentals in Indianapolis and South Bend.

I think the seller (better referred to as previous owner being that you closed and this is a done deal) is bending over backwards to offer to take care of replacing and installing the new unit for $1250.

@Benjamin Sussman I have a rental property in South Bend that I manage remotely

Now 90% of the people on this forum will encourage you to take the high road and the big loss, but my personal vote is it's not whether it's legal or not it is who has the best lawyer.I'm not encouraging you to break the law just bend it extremely to your advantage.

The key is to be VERY conservative with your reserve money (don't ever bend the rules on those) and be VERY VERY aggressive with all of your other money.  

Plus as already been said, you bend here and more and more requests will be made.

In regards to investing in Indiana, I am from the South Bend area which is roughly three hours north of Indianapolis, should I focus closer to the South Bend area to start?

One in Indianapolis, and one in South Bend, Indiana.