Since I'm taking such a cash hit, I asked the sellers agent if they would be able to designate some portion of the sale price ($200k?)

Your estate agent and the title company should be having them pay any unpaid water bills upon closing - this should be shown on the settlement statement.

Lots of research first through Zillow , real estate agent, and family members led us to Queen Creek and New home constructions.

Have your agent start to look for properties that will do the 1031 now.See my comments in recent post. 

Regardless if you invest in state or out of state find yourself a solid agent who knows what they are talking about.

I am a local agent, property manager, investor, and house hacker in SLC area.

You may want to start with the BP agent finder for those markets and then work with them to find good PMs and lenders.

I'm an agent, investor, and property manager.

You can save a lot on costs if you do many repairs yourself.Look into hard money lenders or private lenders for the initial purchase and rehab.Connect with wholesalers, agents specializing in investment properties, and other BRRRR investors to find deals and learn more.

Sounds like your agent wasn't experienced enough in the area.