This may help you understand the mechanics to calculate the Section 1031 exchange gain or loss.

(Refer to the policy language in your original post about the exclusion to liability because renting out your place is definately business use)Notice the emphasis on TENANT... your homeowners policy should have definitions of who is covered by the policy and who is not.

Mechanics is simple.

You don't want the original guy to be in control because he is just ignoring this property now.So that's Step 1: Control the Trust by appointing a new Trustee (that all 5 of you trust)Step 2 is Find out everything you can about the property - what's going on with its insurance, back taxes, any unpaid utilities, any unpaid mechanics lien, etc?

It may have deferred maintenance and could use some updated mechanics and appliances.

How did the mechanicals run during inspections? 

Then determine your financing mechanism and LTV% they will allow.  

How do I ensure there is a clause or mechanism for me to do this after at least 1 or 2 years? 

I also try to emphasis that it cost money paid to the companies who conduct the actual checks. 

The mechanics of it vary a bit, but the idea is you get it at a price you're happy with, the seller gets a price they're happy with, and the wholesaler makes a profit in between.A good wholesaler will only offer properties at an appropriate discount for an investor to be interested in it.