It is possible to convert an LLC to a Qualified Opportunity Fund where the LLC owns property purchased after 22DEC17, however, I agree it doesn't seem like it would be worthwhile for the apartment you already own. 

However from that list - the most concerning items are associated to appearance of mold (laundry wall room/ behind hall bath toilet) and identification of active moisture (laundry room ceiling / active moisture intrusion at lower wall of converted car port) in a few locations.

However, I believe it can be converted into a 3 bedroom.

I have come across an off market property that has a finished top level, and the bottom level is a converted finished living space without pulling permits.

So,If I understand the mechanics of a 1031 correctly, your basis in the property (due to the carry forward basis in the 1031) is Lower than $170k.You are Liable for depreciation recapture while it was a rental, whether or not you declared the depreciation.Assuming the above is true, you will have taxes due.You definitely pay income tax on any interest received.For the Principal you receive (including the down payment) it will be allocated into three pro data portions of:Return of basis/costs-no taxCap Gain- cap gain taxDepreciation Recapture- ordinary income tax at up to 25%@Ashish Acharya When later converting an investment property, acquired by a 1031, into a primary residence, then selling, give you a partial, Qualified Use pro rata calculation for the 121 exclusion like when you do the same thing with a non 1031 acquired property? 

When you convert a property from investment to your primary residence and it has been a part of a 031 exchange there are some additional requirements.1. 

@Wayne Emminizer, converting a property from investment to your primary residence  after x years is not prohibited after a 1031 exchange. 

My first thought would be to convert it into a coin operated laundry room for all tenants to use.

It is also possible that the run down duplex will make more money as a single family, and so it is de converted.

Looking for an excellent real estate/land use attorney in Minnesota who can help us quickly convert this property to a 4-plex.