If your rent marked sustains the increase rent, plus having them pay the water I would move forward with it.

In future if you want to avoid this get another realtor to handle the transaction. 

Do you see any complications with obtaining financing from a future re-finance or from purchasing future property where I can use the free and clear home as collateral?

Hire VAs to do simple stuff like inviting all your past guests via email or inside the Airbnb com channel to sign up to your brand new MailChimp landing page (VA, Upwork, Fiverr and others) and signup form for future communications.

But the short answer is there likely is a way to meet you objectives while completing a 1031 exchange which also preserves your option in the future to continue to exchange real estate.  

As this is going to be my primary residence for a long time I am not worried too much about what my future profits on it will be.

A smart attorney would do this dirt cheap or free to earn your future business if he knows you are an investor.

Now that I've settled in Chicago for the foreseeable future, I've been aggressively looking for a buy-and-hold/house hacking property and have luckily gone under contract for a 3-flat in Jefferson Park.

@Maugno Mora Not a real fan of BRRRR because it's not sustainable...you can pull it off a couple times and then your DTI will become problematic.

Good luck in the future!