Only thing better would be initial deposit and then paid in full upon Certificate of Occupancy and punchlist complete.Of course, standard items should also be checked: licensed, insured, willing and able to pull all required permits, reference checks.I would also commonly avoid the cheapest bid you get.  

@Jason Tucker  you need to add in your utilities, common area cleaning, and turnover costs to determine if it makes sense. 

In such a scenario, you are going to likely have to give up much of the deal in the beginning. 

One of the most common complaints I see on reviews is how the area, location, or house did not look like they thought it would or was promised.

It might be legal now, but it wasn't that long ago and they definitely have prior experience with these scenarios.

I'm not sure if this is a local thing or if it's common in all markets.

Hi Chad, @Denver McClure and I are working with a client on a 1035 scenario right now and it is an easy process.

I would recommend running scenarios with a lender, and if your bottom line is not enough to help you get started flipping, then it's best to hold off. 

Ideally, I'd like to find a balance between affordability and potential for appreciation.Also, are there any common pitfalls or things to watch out for when buying a multi-family property in Jersey City?

In your scenario, selling the relinquished property for $450K after completing a reverse 1031 exchange will allow those proceeds to repay the intermediary without triggering capital gains taxes, provided all exchange requirements are met.