Basically if the interest, taxes and insurance (ITI) is equal to rents it qualifies instead of having to qualify rents against a full PITI (principal, Interest, taxes & Insurance).There are also some DSCR options that can use the STR like VRBO which tend to be much higher then the LTR - long term rents.

Unit A is about 100 years old and Unit B is almost completely new.Pros:-The duplex is in a very desirable neighborhood with home value appreciation year over year at about 50+%-Rent is also in high demand within this area-Cash flows well even with high interest rates and increasing property taxes-Home is price below average cost per sq ft-The house has been renovated and some parts of it has been remodeledCons:-All issues are with Unit A, the 100 year old unit.

Taxes are $500 a month and insurance is $250 a month.

@Chris Seveney the Detroit Land Bank sells tax foreclosed properties that Wayne County sells to the City of Detroit (more or less).These are NOT lender foreclosed properties.

But, if you are younger than 59 1/2, you could get whacked with $50k in tax penalties alone. 

The difference between a $1000 exchange and a $1500 exchange is insignificant when compared to the tax hit if your exchange is done improperly. 

You certainly can 1031 exchange from CA to Hawaii, although the California Franchise Tax Board will make it a little more annoying by forcing you file a new form (Form 3840) each year after you sell...failure to file the form will result in taxes owed. 

Do I need to amend prior returns, or can I take the catchup all in 2023?

A direct attempt at seller financing will result in taxes being recognized for the value of the carryback note (making the exchange less efficient).

Basically in a year where I have a 400-500K loss in stock value, I could sell the stocks to realize the loss, sell one rental house and pay no capital gains tax on its 400-500K profit.But you might be thinking, you still lost 400-500K in the stock market.