If funds are low to buy and hold, you could always try finding deals for other investors by bird-dogging and wholesaling to build up cash until you have more funds available. 

We are in KS and serve a different niche and a slightly different model - but same all in all same type of operation as you -- we are licensed for 41 beds but really can only hold 34/35.  

This means initially, the use of cash flow properties should be the way to accumulate a build up of cash for expansion. 

If you build up more and or a HNWI than there are different considerations. 

Since you're in a grey area, what you want to do is build up the best possible case to argue that you should qualify.  1031 rules are complex, arbitrary, and disjointed. 

Most folks do not have the social skills, fortitude or personal touch to build up a strong network needed to succeed as a RE agent.

I am using this time to simply build up my net work, so that I can expand on my one rental property that I already have in North Carolina.

There is a community over there wanting to build up a boardwalk similar to New Jersey and return North Beach to it's prime (I think it had a boardwalk in 1915 before a hurricane).It has a lot of work to be done but it's in a good spot to downtown, right near the highway so easy to access and get to places all over the city whether you are going to the island for spring break or the university to visit college students it's a short drive.The area it self could be better but I think it has a lot of potential.

My goal is to build up a strong portfolio of long term rental properties that will generate cash flow which I intend to use for reinvestment in the short to medium term, and to enhance my retirement cash flow in the long term.

They argue that it is my responsibility for bill because of the scale build up and sludge.