The zip code, according to the Austin board of realtors has been appreciating at 6% on an annual basis.

Of course the desire for better cash flow is not grounds to win a complaint before the board.

Could we plow the profits from the first investment property into funding platforms like Realtyshares, and still qualify for a 1031 exchange?

In those cases or other specified large rent increases that cause displacement, landlords would have to pay relocation benefits, with increased benefits for the disabled, seniors and those living with minors.The measure would also create a nine-member rent stabilization board to determine annual adjustments, hear petitions for individual rent increases and pursue remedies in court.

A pre-ordinance (built before July 8, 1957) residential building or building of mixed residential occupancy, not complying with the requirements in force and applicable to the building at the time of its conversion, may be altered so as to legalize one dwelling unit, in addition to the number of dwelling units originally authorized, providing that said unit was determined by the office of the zoning administrator or the zoning board of appeals to have existed prior to July 8, 1957, and provided such building complies with the other provisions of this chapter.

I thought those were part of the FHA loan program so wouldn't it need to be owner occupied to qualify for that?

You may qualify for exemption, but definitely check it out as that could cost you way more than the repairs if you are in violation.    

@Fernando EnrileMaybe look into buying a multi-family property (1-4 units) and that way you can use the rental income to help yourself qualify - the multi would need to be owner occupied (house hacking).

These units were cheaper to buy, but are much harder to rent (especially to qualified tenants). 

@Bill Baldwin You may want to file a formal complaint with the state licensing board as well as the board of realtors in the area.