We kept the 3's, but just exercised a little constraint.

I want to help you have information to make your decision, but really don't want to spend 10 hours working on a detailed estimate only to have you exercise your termination option.

And that's the mental exercise you can go through to see just where your tolerance level is for paying tax vs the deferral route of a 1031.  

Based on what I've read here on BiggerPockets, it seems that the IRS's 120 day right of redemption period is merely a statutory right that the agency has not/does not actually exercise(d).Would it even help me as a 3rd purchaser of a property at a sheriff's sale to start the demolition phase of construction during this 120 day redemption period? 

But maybe structure it so that some or all of the rent and option fee are credited to purchase if exercised. 

A good exercise for anyone is to call every single small bank is available, and see if they will do 80% loan to value on acquisitions.If you have a business plan that shows that you buy fix and hold, and you only want 80% of value in a reasonable interest-rate, they may accommodate you 10 20 or 30 yearsJust search for portfolio lenders that will work with you has a lot to do with two things: one is your persistence and two is how organized and professional you areGet a business plan that shows that you're for real and show every single deal you've doneThe alternative is to get private lenders that will lend you 80% loan to value in long-term

Same exercise but bigger dollars.

But, if it was me and I had the choice, I would start small as I was young and trust that I will have a sound understanding of myself as an investor to leverage later for larger returns with lower risk.For the ease of this exercise, let's say you sell your SFR for $200k (there may be better options, but for the purposes of this exercise...).

My wife likes a house we saw for 75k and i"m trying to convince her we need to exercise restraint and just gather information.

Now run the same exercise for the principal paydown and factor in some cash flow / tax benefits on the side.You cannot get returns anywhere near this in the stock market or any other alternative with such certainty and low volatility.