Out of my 32 properties, I’ve seen insurance rates drop by up to 40% on renewals, and property tax increases are finally slowing down compared to the crazy jumps we saw over the last five years.

Property taxes are 2% instead of 1% for landlords as a general rule (some districts may  be slightly higher). 

(d) retained earnings from depreciation use to lower tax burden. 

A lot of Chicago workers are moving to this area to escape IL taxes and politics.

Also Seller hasn’t paid property taxes in 2 years which is a sign the property is in distress.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

The interest would be tax deductible due to interest tracing rules. 

Take the tax free sec 121 first and then 1031 the leftover.

You can take any proceeds tax free and roll into a different investment. 

He is very good about deductions on tax returns so his income looks negligible and of course banks wont talk to him about loans.