I am not sure if anyone else saw it:"Full and Liquidated Damages": This limits both parties to just the damages stated in the contract.

This could limit reinvestment potential.

I'm in Steubenville, Ohio a small town with limited resources.

Best decision I've ever made. 4-6% average annual appreciation rate, stable job growth, population growth, drivable to the Bay Area, close to Lake Tahoe, no state income tax, 4th lowest property taxes in the Nation, much more landlord friendly than CA, land constrained meaning limited supply, etc. 

But he has clear advantage of getting much larger deposit (landlord in most jurisdictions is limited to collecting 1.5 or 2 months' rent payment, which he must place in an escrow vs. $8000-$10000 Scott can collect and use for any purpose the next day). 

If the property was misrepresented in the sale documents, there could be grounds for legal recourse, though this might be more challenging after the rehab.In a similar situation, I’ve seen investors focus on maximizing their returns by operating within the legal limits (e.g., as a single-family or duplex) while still exploring long-term solutions with the city.

I suggest your next lease have such a clause and that you make sure you can find the lease (but i have also somehow lost a lease recently).For where you are now, without a signed copy of lease i believe your options are limited.  

In my limited thinking as a note investor, I’m not sure why that would be happening.Here’s why I say that.

Base the amount of podcast I watched, I know it's very possible but with limited finance, it seems out of my reach.

THEY ARE NOT LIMITED TO ONE PROPERTY.So, they can 1031 to 2 or more additional properties OR 1031 into a rental property plus a DST so that all the profits are used up in the exchange.