Essentially....it is the simple $500k minus $200k, plus capital improvements.

I think it is important for turnkey providers to provide a warranty over what they repaired or improved on the property, but I agree that there should be a limitation on what they cover, and if there is not, then this should be a red flag for the investor.

Ways to improve the deal?

Be sure there is no damage and like @Justin Fox said, if the neighborhood can't support your improvements then don't do it.

It’s definitely improving (10-15 years ago it was basically overrun by meth/gangs).

Hi Betty, buying somewhere that you can force appreciation by improving the asset is a safer strategy than buying and hoping for appreciation.

Otherwise quality of life has improved dramatically.

No details of what the property is, where it is, condition, what NOI is, if the property is fully occupied with market rents or there is room for improvement, how reno does it need, etc.

We would normally call these a construction exchange and an improvement exchange.A 1031 exchange by statute is always a sale followed by a purchase of real estate. 

Do you mind sharing your experience investing in this area and expectations for future improvements?