SOME PEOPLE DONT HAVE THE STOMACH FOR IT LOL....

You're welcome to all those deals you can stomach. 

If your family dynamic can stomach it, I'd recommend house-hacking (ie rent out rooms and/or units of a duplex, triplex, or fourplex).

This is an area that pops up often in my talks with potential investors and my usual advice is to avoid it unless they're local and have a stomach for more work.

Butterflies in the stomach is real.

Yes, you should deduct from deposit for damages beyond normal wear and tear.Yes, you been more than nice to them, on repeated occasions and set yourself up to be taken advantage of.Yes, you should hold them responsible, but I doubt you have the proper lease and documentation to do this properly, nor you have the stomach to do it and you'll cave in the moment they will hit you back with a nasty reply.

I am trying to convince myself that we can go multifamily with a 1031 exchange but after 12 years of landlording 3 units I feel like I don't know if we have the stomach for it.

Bankers can't stomach the before pictures. 

So I know lots of people say stay out of warzones but if you can stomach it it can be good.

If you can stomach that, you should be able to provide a nice down payment for a conventional loan.