Thanks in advance, If you used a Realtors contract, you were duly informed that the verification of property conditions and square footage, etc is your responsibility to investigate.  

I know that would not be comprehensive, but I think it would give me an idea of the pros and cons.A preliminary read of the article you send makes me believe that the paint could be considered a betterment (the paint is better than initially used) or to restore (not to adapt, for sure).My other question was not to determine what is, but when it is fuzzy, how to choose to your benefit.

@Gerardo Arias the first thing I would do is a Title Search on the Property and pull a Preliminary Title Report. 

Please advise if you've come across this and how you handled it or if you have any suggestions.Thanks in advance for any input.There's no easy answer. you'll need to investigate both and choose. 

2) We (husband and I) are the owners of the first property, we are investigating buying the second property with our inlaws as tenants in common, again, is that ok with a 1031? 

Crystal,Agreed and that's what I'm doing, keep looking for the western suburbs market and investigating the Northern, I actually looking into Rockford, Loves Park, Machesney Park, connecting with investors, brokers, PMs in those areas, what I've seen so far is Loves Park, Machesney Park are better than Rockford, cash flow is pretty good, PMs are available and with PM fees, properties in those areas are still generating cash flow, this can't be done in the western suburbs at this point, any properties popped up and if I add PM fees, it'll neg cash flow and of course, there's a down side in the Northern Suburbs, slowly appreciating.  

This sounds like it could be a home run and worth investigating. 

Time being of the essence I'm not sure the best route to determine feasibility which could then lead to some preliminary quotes.Thanks,

Get a preliminary title report.

In any case, in the past couple of months, one of the neighbors decided he did not like that and started to investigate our tenants when they moved in, and once they told him that they are there for less than a year, he reported it to the HOA, and I get a warning email from them.