The engineering company recommended "subsurface soils be improved to minimize further subsidence damage.

With uncertainty right now in the market, I don't see the lending landscape improving in the near future.

Your right it should have nothing to do with the 1031 but it it goes on the hud it is messy and easier for the service to claim you are receiving boot  A simple statement to that effect can go into the contract and the title company may even be willing to handle that part for you.Re: the excess funds- depending on valuations and any work needed on your replacement properties there may be a way to enfold that into improvements to tour replacements and still keep tax deferred status of that money

If you are a buy and hold type you will find many opportunities available; perform your due diligence as many houses require more construction efforts or cosmetic improvement than others.Hope this helps.  

Be sure you have an ownership interest (land contract or contract for deed) instead of a leasehold interest (lease with option to buy) before you put a significant amount of your funds into improving the property.    

Real estate has improved considerably from its darkest period of 2008/09 and likewise so has the work contractors find.

Please tear this idea apart and let me know what can be improved.

They all have equity and all are considered fixer upper/opportunities to me where I can improve the value. 

As long as the relocation meets the two requirements above.Increase in Family Size - A borrower may be eligible for another house with an FHA-insured mortgage if the borrower provides satisfactory evidence thatThe has had in increase in legal dependents and the property now fails to meet the family’s needs; andThe loan-to-value (LTV) ratio on the current principal residence is equal to or less than 75% or is paid down to that amount, determined by comparing the outstanding mortgage balance to a current residential appraisal.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 such as divorce, legal separation, etc...) the principal residence which will remain occupied by the existing co-borrower.

With a conventional loan I was planning on financing the purchase and using cash to finance the improvements.