Thank you both for the quick responses and I apologize for the late reply's. 

My initial setup was so poorly managed that the IRS sent me a ‘late fee’ for $2k; so being remote you need a good lawyer and Cpa. 

@Giovanny Garcia better late to the party than never!

Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

We estimate that the remodel will be $230,000 because of the high-end finish, and the transformation from a 1,200 SQFT home into a 2500 SQFT home.

There's already a ton of finished condos sitting empty. 

The basement is unfinished, but is only about 3 feet below grade, and has front and rear entrances, full-size windows, and high ceilings (we would not need to dig out the basement when we finish it).  

The problem we are having is almost half of the finished house square footage is below grade which is a walkout basement. 

If not then it’s actually too late to do an exchange if you closed your sale.In order to defer all tax in a 1031 exchange you must do two things.  

If that number added to the purchase price, compared to the ARV of a 3/2 of similar finished size is favorable, then it is at least in the running to pursue further with actual GC rehab bids and inspections.