You have no idea how "entertaining" your life could become should you proceed with having your MIL as your renter. 

If you went through the proceedings to evict it should already be on their record. 

Proceed with precaution! 

Proceed with building connections in that market. 

The titans of the value-add model can likely argue against all of the advantages in favor of that model, so I suppose you could say these advantages are debatable.Nonetheless, we proceeded to place the land under contract and begin what would prove to be a grueling 6 month process of vetting all details of the business plan that the sellers had outlined for the development.

Borrow enough money for 3-6 months of expenses while you sell it and then pay off the loan from the sales proceeds.

Just add up all the cash you put into a property (purchase plus any other cash injections such as repairs) and compare it to all the cash you got out (cash flow plus net sale proceeds). 

If you wanted to be a little more direct, you could also get your realtor to verbally float your $240k to the other side just to gauge their response and proceed accordingly. 

In your case that would have freed up $20K - $30K for you to reinvest for your benefit.Unfortunately the 1031 must be started prior to the closing of the sale of your old property.Once you have closed and received the proceeds you can no longer do the tax deferred exchange. 

So your $125k investment yields $250k in net sale proceeds.