To echo other comments I would recommend buckling down and saving up a bit of a nest egg.

Will the maintenance associated eat up all the cash flow?

Also, you have a pretty significant nest egg.

Gonna have to eat this one and chalk it up to a lesson learned.

That is someone wanting you to hand them a steak dinner to eat and then has a knife ready to stab the hand giving them the food.No legal advice given.  

What I might say is to take on a light remodel with your first nest egg you're using.

When I go out to eat and pay for a meal is that a conflict of interest? 

Mind you, it might not be such a bad thing if you plan to hold long term.I believe they invest there themselves so, in a way, they're eating their own cookie.

With only a $70,000 profit a reverse exchange will eat into your profits quite a bit.  

The taxes really eat into your take home money though, so after accounting for vacancy, common area utilities and repairs, you might make $32,000 a year (.04x800,000) (assuming you’re paying 24000 or 2000 a month equivalent towards renting your 1 unit apartment in your own house) BEFORE paying your mortgage (PI).