I hope it's helpful as a thought exercise at least.

A 1031 is definitely not a do-it yourself exercise. 

So subject to has some risk, but as long as the bank is getting paid, the chances of them stepping in and exercising any due on sale clauses is very low. 

@Wade Guy Here's the problem with this exercise:  lets say you start off with one house, then you trade it for a bigger house.  

(d) A statement that includes both of the following:(i) That the department is appointed the agent of the foreign limited liability company for service ofprocess if no agent has been appointed under subdivision (c), or, if appointed, the agent's authority has been revoked, the agent has resigned, or the agent cannot be found or served through the exercise of reasonablediligence.

If you are making monthly installment payments for their " preferred equity " and it looks like a loan, its really a loan........I would look at giving them an Option for the equity which allows them the right to purchase the property back and in that Option, give yourself an ample amount of time to buy their Option back and make sure they CAN'T exercise the Option during that period of time. 

The exercise, should be played out over the length of the hold.I would also take into account the tax plays.

Try this exercise: look up (1) the historical price of your Midwest SFR at the time of first sale, (2) the rate of inflation from the year the SFR was built until the present and (3) the market value of the property. 

I have read a few other forums discouraging this, however, I tend to do very well with coaching and guided exercises.

Waiting for your property to appreciate, the repairs to be completed, and the right tenant to be found can be nerve-wracking, but exercise patience.