Your 1031 will have to be for the net selling price, not just the amount you clear after paying off any debt. 

If it's a matter of a quarter point but the more expensive debt is with a bank that offers better other terms like amortization and LTV, and they have a rock star loan officer, I'd go with the slightly higher interest rate product.2.)

The other option I potentially see is to partner with someone that has cash and/or better debt/income ratios and partner on the next purchase.

I think what you describe is pretty much standard performance for rental properties if your not paying cash and I am just assuming your putting max debt on them to try to get your return numbers into your criteria..

The advantage if needed by calling it an investment home is that you can use the potential income from the property to help your debt to income ratio where you cannot do this on a second home. 

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

It seems to me that there multiple deflationary trends in the world right now but I don’t see a politically acceptable exit of all the accumulated debt in Europe and Portugal without using inflation.

Or we print xxxxx dollars to cover our interest and debt payments.  

Just be cautious of DTI (debt-to-income) ratios when qualifying for additional loans if you’re relying on projected STR income—most lenders require at least 12 months of rental history.

The obvious answer here is to somehow get some income and start paying down the credit card debt.