What ever market you choose do your homework on areas and talk with agents, PMs, and other investors to get the anecdotal info as well. 

Is there any homework I can be doing in the meantime?

You will hear a lot of people trash New York State, but if you are operating honestly, doing your homework, and buy in the right areas, you can mitigate a lot of those problems.

I also suggest for people to do their own homework.

Looking at it doesn't change the math. 

All I am saying is with any investment, do your homework and if something sounds too good to be true....If anyone wants to pm me with questions or for more insight into our area or the section 8 program (which these companies seem to be heavily advertising with) and some of the changes the program has seen locally in the last year, feel free to reach out. 

We could be wrong, but it doesn't seem likely.Carini did the math for you early, if after repairs it assess for 240k as you suggest, you'll be able to refinance and pull out 187k, of which about 116k will go to paying off your previous mortgage leaving you with 71k to go plan your next move.This is very compatible with living in the house and getting roommates. 

Again, I'm just a guy so do your own homework but I've been there before, knee deep in raw sewage and when you're going through Hell, keep going.   

Deals, markets, are good or bad based on math. 

The principle of a 1031 exchange may work, but the math probably won't, as has been pointed out by others.Should I continue?