We used a partnership, I had my wife listed as 51% owner as a valentines gift :)

If you can gift your heirs cash flowing real estate they can rely on, I would think that is practically better then a massive stock portfolio. 

These are 3% down and allow you to source your downpayment from gifts or grants as well.

They would essentially gift the money from the lenders perspective, but from the 1031 perspective the funds will be transferred directly to escrow at closing so it may satisfy both sides.

My thought was that we would ask for the money for down payment in the form of a “gift”, and then do all of the work of finding and purchasing the right property, budgeting and managing all of the renovations (and doing most of the labor ourselves), and selling in the span of 4-6 months. 

A great book I gift to new RE investors is Profit First by Mike Michalowicz and it goes into detail about what types of accounts to open as a business owner. 

If they are not going away any time soon, you can suggest if they can stay with friends/family and you can either give them some money or restaurant gift cards as a thank you/sorry for the inconvenience to keep them happy. 

I made 120k in equity last year with the sale of the houses but because of how stupidly our business was set up, Our tax guy suggested my partners give me most of my equity as a gift because we didn't want to get taxed on it twice.

Scott,  I was gifted your book by a family member but wasn’t able to get any of the digital files.

For the second home loan you can get a gift from a relative if you have at least 5% down of your own funds.