The property LP is $85k and they said they would take $77k. the property does need some love but it is fully functional, clean and safe as it is currently occupied by great homeowners that take care of there things. im going to have house appraised and a few contractors there to evaluate and estimate.

I have used it a few times and the functionality is fairly simple.

And it is much easier for you to sell requiring a floating closing date so you can bunch the two property sales as closely together as possible.A 1031 is an added on process and the intermediary's only role can be the 1031 function. 

Their focus will be on function, though, as opposed to form.

And without proper database functionality, you'll eventually run into issues.

Is it correct for me to think of this as a way to eliminate the cost, time and potential headache involved in selling this house and ultimately purchasing and fixing up another rental property, by considering that the expected profit of the sale ($70,000) is functioning as a down payment on a $420,000 rental home (the one we already own!) 

Please give me a little more than the IRS line that goes like - anything necessary for the daily function of the business.Thank you!

Depending on the amount of painting and cleaning required, a unit might not be able to be placed in service until painting or cleaning was complete, but you could reasonably place a unit in service with old door locks, no flowers, and a non-functioning garage door opener. 

I’m also looking into other areas of the country, but that’s neither here nor there.Assuming all that, I plan on using the HELOC (500K-600K) to purchase multiple SFH or one or two multifamilies, functioning like a cash purchase, pay in full for each.

These units are less attractive and less functional for non-disabled people and harder to rent overall.