The agreement will stipulate income allocations, distributions, etc. 

Given a 5% response rate on mailings, and about a 5% conversion rate to get a viable deal, how should I be thinking of a reasonable budget to allocate to direct mail?

I don't know of any other profession that does that.First lets talk about timelines.You have to wait for a court date to be allocated 2 - 3 weeks.You have to wait for the hearing date to arrive - up to a month.You have to wait for the court paperwork to send to the sherriff after you win - 2- 3 weeks.You have to wait for the sherrifs to schedule your eviction - anything up to 3 months.So rushing to file eviction as soon as legally possible isn't going to mitigate much of that loss.

I am re-allocating capital out of some value plays into cash flow plays. 

@Jeff Sprunger  In that case one could argue he would actually gain more value through the transaction because if he sold the lot, the portion of the overall mortgage that was allocated to the lot is liquid cash that he can use and he's being charged a much lower rate than what he would be charged if he borrowed that same amount of cash unsecured.  

I did allocate $6k in closing costs when using the BRRRR calculator.  

@William Yeh,  In addition to changing asset classes with the 1031 you change cash allocations as well. 

It is not very long and by going through the rules you can have a decent understanding of things you should be thinking about in terms of exit strategy, conflict resolution, shares allocation.

I would look at all of your assets as a portfolio with a target asset allocation mix.

Dealing with tenants that have a personal relationship with the previous landlord is hard enough and never mind when they are paying less than market rent.Hopefully you factored all of this in when negotiating the purchase price, but make sure you are leaving money allocated for having to eventually evict all of the tenants.