Secondly, the appraisal often notes functional obsolescence because of this and a lack of a common area.

There are some important factors that you need to take note of with regards to the 1031 exchange or the Tax-deferred exchange: •One important requirement you need to have if are an investor and you want to take advantage of this 1031 Exchange is that the property you are selling should be significant when it comes to trade or business functions that are beneficial for the people as well as for the government.

Quote from @Zachary Deal: One thing to keep in mind if you are doing this is that you are likely to create "functional obsolescence" which could mean you are not able to get a new loan against your property and it can be difficult to resell as well. 

Another issue I see with older homes is the layout and functionality is tough to manipulate even during a full gut.

Most do not follow it which is you can have someone assist in capital raise but it cannot be their only function - it must be less than 50%.

Sometimes maybe often times they aren't doing enough to track down the owner or owner's heirs and just collecting checks from the court.

While we were in escrow, the title company discovered that the owner didn't disclose a second mortgage on the house to neither her agent nor the title company, her plan was trying to dismiss the foreclosure in court and hope this would go away before anyone would find out about it.

The finding can be quashed if the U&O is clean and the municipality doesn't support the inspector's finding, but that might require some court action.

@Celine Li I am curious if, before posting this, you clicked on the search function in top right, and tried looking up this subject/ answer/ question???? 

Bk is FED though so anything involved in bk will need to be verified thru the court nationally before a sale.