The thing I've never understood is this idea of mitigating risk through % increases.

I want them out as soon as possible and am willing to stomach winter vacancy but with strict Massachusetts eviction laws (also they have a child) I want to execute at the right time and hopefully mitigate risk of legal fees/tenant living rent free.

And while the lien may not need to be eliminated, just the arrears brought current, ownership can't change without triggering the due on sale.Your annulment scenario is the proverbial needle in the haystack and did happen in the past (Albeit infrequently) but I wouldn't count on that in today's world where a bank has the Loss Mitigation department not in communication with the Foreclosure department.

@Tony Lin, There are some incredibly powerful strategies that can be coupled with the 1031 exchange to mitigate and eliminate any capital gains tax on real estate in your lifetime and beyond.  

Think through some scenarios such as major repairs, loss of job, market crash, extended vacancy...etc and figure out how you would mitigate each risk before you make your decision. 

=> A risk of higher rates.To mitigate this "rate risk", fixing in a rate on 'cash-out/investment' property may be worthy of consideration.  

However, if uou drain all your funds to pay cash and have another source of large discretionary income that risk is mitigated.

Just think of them as 100k in 3 year bank, i'd take an all sourced out break even deal everyday, so long as it's minimal work, ie hired property manager and you're covered at max possible expense rates. if you save a bit, good, if not, fine. you make enough to live the way you want, you don't need the extra 300/mo, too small for what you are making. with the 800k you get tax shelter benefits and CA proposition benefits which lowers property taxes significantly.

this can really help mitigate the risk from the tight timelines of three overlapping 1031 exchanges.  

It will mitigate some of the risks and lets you take advantage of less money out of your pocket to start.