There are an so many variables that come into play that the contractor can't control or even predict.

I don’t play a part in credit.

If you were in similar situation how would you play your cards ?

Remember that capital gains comes into play when you can no longer say you lived in the home 2 of the last 5 years. 

So if you are playing to max returns that's possibly the way to go.

There are buyers of a few remaining years left on the lease ( I am one of them for value add) but are typically all cash plays.   

The west coast is a great appreciation play if you are looking to hold long term.

In other words, the BRRRR strategy.Obviously appreciation plays a part and if you're getting the property at a great price.

They do 1031 exchanges and they must have thousands of landlords just like me, so they know how to play this.They're requesting a rent reduction that is substantial, but not so much that I'm eager to hire a local broker and pay a large commission for their involvement.

Pragmatically, what you will want to do is get official with this loan from your buddy.