I do wonder if I would be better off just paying the taxes and not messing with the 1031 and having a new primary home so I could sell or rent the other.

Keep in mind the more work they are going to be doing and the better the job, the more you will have to pay them.

I can't talk to family or friends because everyone around me thinks i am doing better than i am actually doing (or should be doing).

For that reason alone I'd sell :)But that being said, if you truly think that appreciation is better then selling and 1031ing to NC is exactly the move to make. 

If you wait, you'll be able to get an owner-occupant loan and house hack, putting far less money down with a better interest rate. 

But in my opinion, it is a much better alternative.

Since we are total amateurs, we don't which way is better (either get a property for short term or invest that extra cash .Any help will be appreciated!

You'll have a much better chance to find an awesome PM at the rate that you want to pay :)

Any construction will come with LOTS of permits.I don't know SLT market, it's CA and im in NV, but I've helped more than one person sell in Incline and buy in Reno because the numbers work better for them.I suggest you look into property taxes, and tenant protections of NV vs CA. 

Many of us have IRR thresholds for real estate at 20+%; otherwise, better off investing in index funds.