I’m sorry, but you’ve demonstrated that you’re in over your head.

For a 1031, the thing that matters is your intent, which you clearly state was to have this as a long term rental prop.I would speak with one of the Qualified Intermediaries here on BP, like @Bill Exeter or @Dave Foster, to see specifically what you would need to do to demonstrate intent to the IRS.

Fixed rent is a great way to get the property demonstrating you have guaranteed income then you can switch to commission down the road to get more upside on your investment. 

I told him that I could buy an income producing property for that price tag and that he hadn't demonstrated what I would receive for the money.  

How you approach the mentor demonstrates how you will approach real estate investing.

But for those who demonstrate the discipline the power of the deferred tax is a pretty compelling carrot. 

Statements such as: "I still trusted Wendell, or at least knew he was the only one who could get me out of this situation, that he had gotten me into." demonstrate a lack of responsibility.

The Pareto principle gets skewed I think when trying to help or 'mentor' those that have demonstrated nothing but poor money management skills and a vision of easy riches.

but for whatever reason as a society we demonstrated we are unwilling to do that in 2009.

With water it can be 100 different things.If you can demonstrate the leaks to the water department they will usually do a bill correction adjustment for most of the leakage.