I always honor my contractual obligations (even if I've made an oversight that I regret), and I expect the same from the other party to the transaction.I'm not trying to be a jerk; just offering my perspective of how this looks to an outside party.

If there I  neighbor's kid they love those chores, and give them ten or twenty a month to check for the papers.Ask a neighbor to park their car in the driveway every so often, and encourage it if they re having  party and need room in theirs for their guests.

Third, the Minneapolis area has high wages, low vacancy, and higher-than-average appreciation.

To me, a relationship where both parties have something to lose is more likely to be successful for both sides.

I dunno...maybe that party will just die.

In exchange, the turneky company is the one that benefits from the spread between what they put into the prop and the market price they sell to you at (should be market price, a reputable company won't inflate their values and third-party appraisals should back up their prices).

If so it will add another layer of complexity, otherwise there are plenty of third party section 8 managers out there.  

Why not pitch it to any interested party that will pay you an assignment fee? 

First of all from the developers perspective this is really nothing more than a reverse exchange where an unrelated party takes title and holds it until the developer completes his sale and is able to 1031 into that new land. 

So yes it can be held "hostage", In fact that's exactly what leases are for to hold two parties to terms that both have agreed to abide with.