So that was one trade off we did not make.  

Not a terrible idea to generate cash flow, but there is definitely some trade off. 

If you sold your 1031 property for $400K and wanted to purchase a split use property for $800K then you could use the 1031 and take title to 50% as investment and use the other 50% in whatever way you wanted.If the property you were purchasing were only $600K then 2/3rds of it would have to be allocated to investment in order fo you to not have any tax consequence.  

Please help me understand the tax consequences to options that the seller has.  

But know that to get connected with note sellers and trade desks that sell notes it's not easy.

I'm in an electrical apprenticeship so I can connect with many different trades when I decide to get into other areas of real estate.

A 10-year bond is currently at 2.34%.Outside of anything catastrophic (North Korea acting out, Fed throttling the fed fund target rate, trade war with China, etc) this bull has at least 5-10 more years before the start of it slowing down.

I buy at auctions, there are a few trade secrets when it comes to dealing with tanks that mitigate the risk but don't cut it out completely.  

As to the consequences of transacting business in Virginia without authority:For foreign stock corporations, see § 13.1-758 of the Code of Virginia.For foreign nonstock corporations, see § 13.1-920 of the Code of Virginia.For foreign limited liability companies, see § 13.1-1057 of the Code of Virginia.For foreign business trusts, see § 13.1-1247 of the Code of Virginia.For foreign limited partnerships, see § 50-73.59 of the Code of Virginia.

I am intrigued by possibly going to a trade school and studying a relevant and useful trade in real estate (plumbing, carpentry, HVAC).