If you provide a scope of what you are demo-ing, you may have better luck with someone's experience to comment here, but costs can vary regionally, so a local contractor would give you the best actual estimate. 

They can provide you with some great insight about investing in that market.Staci

Time would be the biggest variable.Assuming the same repeatable services will have to be provided for STR & MTR, that are not provided for LTR, the costs may not be that different.Taking care of lawns, monitoring & paying utilities, taking calls, etc.Some services will be the same, but vary in frequency: cleanings, resupplying amenities, responding to inquiries, bookings, granting access, etc.

There was a lot of little tracts of west Texas desert land that used to be added to deed swaps to make the valuations work out back in the day.The reason for a 1031 in this situation is that it provides crystal clear direction and documentation. 

Regards,Abhi.Abhi, There's no way for an investor to have an opinion on that without doing alot of due diligence (and way beyond the basic info you provided). 

I would recommend obtaining a purchase/renovation loan, which would provide you with the funds to purchase the property and pay for the renovations.

Just curious if either of you considered any other turnkey providers?

@Eric LunsfordAs mentioned it’s taxed at ordinary income - but there are debt funds that do private lending that can provide investors a 1099-DIV vs 1099-INT which is a considerable savings net taxes - it’s about 2pt delta - meaning 10% from debt fund is better than 12% taxed as interest (and a lot less work)

If the neighbor were to take a further action, then your title insurance may well provide coverage for you. 

My philosophy is very simple: never sell a property unless you can (a) put the money into something that provides a better return or (b) it moves you closer to your goal.3.