• ARV compared to asking price - If there‘s a lot of room for appreciation I‘ll look deeper at the deal

You don't want to get to closing and find out that the property can't be used for the purpose they intended.

It takes longer to rent than a comparable SFH would because it doesn't have a backyard.

They will want it in your name which will defeat the entire purpose of your entity transfer.So I would never recommend that you transfer title right before (at least in the same year) a sale. 

You can find sales comps by looking at SOLD rental comparables in your area.

You can also view under contract and sold to compare prices but be sure to check sold date if you do that to make sure they are sold this year if you use them as comparisons. 

If it all things were equal, I'd purchase a purpose-built multi-family vs. a converted home. 

@Matt K.You can not compare KC to CA.

Consider contacting him to see what he is up to.Bigger properties lead to:1) Less tenant risk2) Better economies of scale (less cost/unit compared to single family or small multifamily)3) Better returns (see 1 and 2)

A 1031 exchange is not right for everyone, but when comparing the numbers...Option 1: Have a larger asset base to work from and reinvest in income producing properties (via 1031 exchange), orOption 2: selling, paying taxes, and investing in the stock market (which may or may not be paying dividends).An exchange can also be thought of as an interest free loan from the government - you only pay the taxes when you do not reinvest in like-kind real estate.You do make a compassionate argument for your current tenants, and that does not go unnoticed, however as @John Warren pointed out, your return is very small.