What's the best way to properly "plan" for an exit?  

To answer some questions above, this is a properly executed 1031 exchange of like-kind investment properties

I've decided to place an offer for around $11,000 and subject to Joe pulling the proper permits and having the proper inspections completed by the town building inspector (and of course another couple escape clauses).

If you are willing to part with the functionality of the form letter (e.g. inserting names and addresses) I have seen people simply handwrite a letter, keep it very general, and just make copies of that.

Yes I believe in proper due diligence.

Yes, Yes, with proper deposits and built in protection with rent prices via maintenance reserves.This is one method we are considering rather than trying to find a flip to increase investment capital this year.Thoughts, considering low Cash on Cash but possible increased investment capital through equity?

I properly recorded a second mortgage on a property.

Hopefully this image posts properly.  

Let me know if you have any questions on the below link.http://www.irs.gov/publications/p551/ar02.htmlIncreases to BasisIncrease the basis of any property by all items properly added to a capital account.

Our appraisal came back at 170K, citing "Fair" functional utility because it is a 1 br/1ba & a recent foreclosure on a comp home lowered the appraisal value.