Would there be any complications getting permit approval from the city? 

I hope you find it useful.Retail Real Estate and the COVID-19 CrisisRetail has developed a serious image problem in the past decade-- one that will be further complicated by the shock to the economy and consumer behavior caused by COVID-19.

However, this tenant is refusing to leave per the Virginia governor's stay at home order but to complicate things, he threatened to call police if I showed up on my rental property and did any showings of any room at the townhouse and claims he called the local police department and they said I would be cited/possibly arrested for violating a stay at home order.Does any of what he claims even sound right?

@Jason Collins, There's quite a bit of misunderstanding about how expensive and how complicated it is to complete a 1031 exchange. 

The real story is much more complicated.

Is it just too complicated?

Normally I'd suggest you be the bank, the builder runs the project, and the profit is split 50/50 at the end, but your situation is more complicated due to the second house that you're going to occupy instead of sell.

All things considered, its a rather complicated conversation to have via a public forum.If you would like additional help, feel free to PM me.

I imagine that legal fees can add up even when there is absolutely no legal complications.

Its more complicated but it’s more lucrative than residential.