The nuisance and abatement officer is involved, but they have limited resources and he is pretty much a one man show in handling these issues.

I work 65 - 70 hour weeks running a restaurant, so my free time is really limited. 

I'm not sure how this would help you, and I'm not sure what you mean by "get mortgages on the full value of the 2 houses".All mortgages are going to be limited to a certain Loan-to-Value (LTV) limit...Usually around 75% for a residential investment property.

With a recourse commercial loan you will likely sign something saying you personally guarantee re-payment.And for sure it affects your ability to borrow going forward because it is a personal liability and as such needs to be disclosed to any lender you try to borrow money from.

My experience is limited, but I hope to contribute as is feasible as I take my licks in this arena.

I have not done a 1031 exchange before, but I feel that reducing my tax liability is a good idea.  

You could legally form a Limited Liability Partnership that would give you some protections.

It's unclear what you mean by "do cash out re fi to their max LTV and then sell there place to avoid capital gains tax as much as possible and only pay on what's left over".Refinancing does not affect your tax liability in any way.

His exposure was limited he said.

The deadline is very strict, and the custodian must receive the money by the deadline.If it's anything other than A or B - there could be some important complications.Once you acquire the property, ideally you should limit your personal use to no more than the greater of: 14 days, or10% of the total days you rent it to others at a fair rental price.If you exceed this number, your tax deductions will be limited.And when I say "personal use" it does not mean just you.