My question is about whether I should continue renting my property at the current rate, terminate the lease and try to raise the rent (may get ~$500 (40%) more), or sell it (may net ~180k if sold now). 

She already has huge capital gain on the house, just want to sell it, without back to market again.Another house I looked at in the nearby neighborhood back in 2015 was a unlivable house, listed at 535K, I was trying to give offer at 510K, but my agent came back saying it already had multiple offers, it was sold at 590K.

I have a copy of QuickBooks (2015) from another business I own, and would like to use that.

Just a warning though, in my area duplexes are often held extremely long and rarely sold, finding good duplex comps to compare is difficult in some areas.

When its sold, can the funds be use to pay off their current primary residence with a 1031 exchange, or can that money only be used towards the purchase of new properties? 

RE agent says estoppel not needed; a copy of the lease is enough.

This is the way most reo’s are sold.

They overpriced the house, it sat for months, they took it off the market... moved in, then sold it later for $20-30k less than they originally wanted...

For starters, there's no indication at all that there's a coming downtrend, so if you sold today you could be waiting years. 

I do not want to cause grief on the person that lives there by stopping in and questioning but thought about sending a letter to see if they would allow the 31% or 62% to be sold and allow a survey and appraisal to be done.How would I go about purchasing the 31% owned by the bank and getting a clear title?