For a property to qualify for a 1031 exchange, it generally needs to be held as an investment or for productive use in a trade or business, which typically excludes properties built with the intention of selling.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it.We have a 12 page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord.

In doing this you've likely committed fraud since your entire intention was always to close with the 2nd at 100% LTV...I've watched the video where Pace describes this and in essence he says that treating them as two separate transactions is fine and there's no need to tell the lender.

Vacating a jointly-owned Property: A Borrower may be eligible for another FHA-insured Mortgage if the Borrower is vacating (with no intent to return) the Principal Residence which will remain occupied by an existing co-Borrower.

Purchase price: $310,000 Cash invested: $20,000 Bought and lived in while making upgrades with the intention to rent out.

I am not trying to avoid taxes but defer them which I thought was the intent of the 1031 exchange.

The potential issue is documenting your intent. 

In my experience these are the levels of how financial fraud is doneLevel 1 - The “sponsor” is a fraudster from the beginning and the entire investment is a designed fraud designed to steal the investor's money Level 2 - The sponsor initially intends to operate legally and honestly but the temptation of easy access to money, usually fueled by addictions to drugs, sex, partying, etc. leads to the bad decision to line the sponsors own pocketsLevel 3 - The sponsor intends to operate legally but a crisis in their life resulting in a need for money leads the sponsor to “borrow” from investor’s funds with the full intention of paying it back ( which they are unable to do).Level 4 - The sponsor intends to operate legally but the assets under their management incur substantial loses; the sponsor attempts to cover up these loses by “temporarily” borrowing from one investor to pay another or submitting false results.

Even lending to an LLC, which Dodd-Frank explicitly excludes, will get you hammered if the intent of your borrower is to use the property as a personal residence.For example, you could make a real estate loan against a gas station.

The deposit is the bond of good intentions.