@Tim Hem The Section 121 Exclusion and 1031 aren't mutually exclusive.

(Which aren’t taxed as capital gains.)

If local options aren't a fit, expand your search to other markets with strong rental demand.

I love it.Initial things to consider - Real Estate is a tangible investment versus stocks, which aren't. 

I’ve heard that this neighborhood doesn’t really have any problems from a social worker but outside areas aren’t good. 3/4 units are currently rented at $900 each, renters pay utilities.

You aren't trying to nickel and dime people but just to curb abuse so it should be generous.

They might be smart, but they aren’t the only smart people. 

If you are in the less common areas where the taxes and ins are increasing by leaps, then the solution is to sell the property and take your equity and buy in an area where the tax/ins increases aren't out of line.

Your pictures aren't doing you any favors.

These currently aren't fancy units. - Value add - When building additional units, what steps should be taken to determine how many can be built?