If you're licensed (or unlicensed) and are a principal in the transaction, you can use any form you wish but it is foolish to use a form that does not have the required notices included it. 3. 

There is a safe harbor from the IRS at 2 years. 

Do we need to go through the whole condemnation process to qualify the transaction for a 1033 exchange?

I am an investor, agent, and mortgage lender here in AZ who primarily does investment transactions.

Its my understanding that the individuals are responsible for all the legalities, contracts ect to make it safe not to get ripped off. 

A 1031 Exchange is also known as the Tax- Deferred Exchange, which allows the different shareholders as well as different depositors to reinvest the profits that these people had acquired as well as earned, most particularly when it comes from the different financial transactions of the property that the investor had advanced without acquiring different taxes from the government.

It also depends on your goals and how safe/aggressive you want to be, how much you want it to earn, and what meshes best with your lifestyle. 

Are the older homes in this area safe to buy or do they break down a lot?

if you're a few years out before starting in the US with RE Investing, the best thing you can do is work on your credit and safe money and start establishing business credit with banks and credit unions here in the USenjoy Panama, and good luck

When the transaction closes, the purchase is funded, and we set aside additional funds in an escrow account to pay predetermined professionals to make any required or desired repairs or upgrades to a property AFTER the buyers settle on the purchase transaction.