It's not like people won't know that the property isn't in a flood zone; if they finance it through traditional financing then the lender would most likely require that they carry flood insurance. 

But the rules of the 1031 exchange will let you accomplish what you want without doing that too.

You'll spend a lot of time (sounds like you may have already) spinning your wheels in trying to find the right lender, whereas a solid broker can pair you up with the right fit right away and get your project moving. 

should i refi or just keep on market paying interest only? 

So, I'm really just looking to find more off-market properties. 

How does one go about making sure that a company is legit and not just a shell or scam?

I would like to tear down and rebuild the front house and rent it out I already confirmed with the city that the zoning is ok for the rebuild.

Duct works goes from package unit to crawlspace to bottom of the floor to the unit.

Maxmimum loan amounts for FHA are the same across the nation for the most part except for the high cost areas of the west, east coast, or specialty markets like Aspen, CO Los angeles, New York, NY, and others as they have higher limits for 1-4 unit FHA loans.

This is probably something you should just add to the rent for your next tenant.