There are always some self-righteous individuals who try to appear as very professional figures in this community. 

Your 1031 will ultimately be only as good as the individuals directly assigned to your exchange.  

Since you have bought a foreclosure before, at least you have experience with the liens and the process, but you won't get a final tally of the liens unless you can get your title company to run soft title search for these things in advance.Closing on a foreclosure anywhere in Brooklyn seems like a nightmare to me from an operational end.

By way of example, a lender may charge retainage, only release soft costs upon C/O, may limit loans to a set number of draws or only allow draws once a certain dollar amount of work has been completed.

While I agree the rent by the room strategy can be great if you know how to manage it well, from a lending perspective, a lot of 30 year DSCR note buyers won't allow properties with individual room leases, so it could make refinancing more challenging. 

Renting an individual room is all but guaranteed to be cheaper than them renting a 1/1 apartment alone.

I'm going to get a survey regardless, but I'd like to line all this up before I start spending on soft costs.The weird thing is I see other investors doing these DADU deals and I've never heard anything mention the above requirements / scenario. 

Also, I'm not sure if you are demoing an existing structure, if the structure is freestanding, etc, but this will obviously greatly affect your overall budget.For our project, most of the material prices are in line with expectations, but where we've been shocked with recent increases is the soft cost. 

Most reverse exchanges are done with cash from the client or a private loan of some sort from an individual or a portfolio bank.When your old property sells you will have that cash in your account to purchase the new property. 

Your tenant is experiencing life on earth and it shouldn't be a shock that the corners of the world are not all rounded and soft and warm to the touch.