Depending on your exact situation, you could likely get something closer to 7% and make these numbers work a little better.  

And if their both right or wrong-how to handle this situation?

Those tend to be the neighborhoods that are gentrifying.Unique stuff to Pittsburgh I would say is don't go based on zip codes since one zip code can be composed of multiple different areas/neighborhoods.

Don't forget to run your numbers multiple ways.

In my situation if I’m earning $18,000 in cash flow from a property my tax benefits are offsetting at least that amount and I’m still paying $0 in taxes so the real estate scenario is attractive to me.

There should be some financial advisors or real estate attorneys on here around your area who specializes in hospitality ventures and might provide valuable insights tailored to your situation.

But after an exchange - sign the purchase documents with one pen and pick up another pen to sign the refi docs :)Another strategy you could consider is reinvesting into multiple properties, where you purchase the first property cash (ensures some security and concentrates the equity) and the second property with a mortgage.

In your situation there is actually another factor that may work in your favor.Only the proceeds allocated to the sale of the building can be used in a 1031exchange. 

—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.This email is not intended to provide legal advice or serve as a substitute for legal research to address specific situations.

There can always be a situation specific to you where your intent was to hold but something cause you to change that.