Utilizing credit as you apply for a mortgage sounds like trouble.With your cash you will still have the Heloc for liquidity. 

The incentive to maintain the property just means they know if they don’t you have financial leverage to not return it and apply to damages.  

My tenant left the carpets badly stained and they stunk so bad like old wet dogs that my painter refused to go in there until they were ripped out. 

I read up on the 1031 exchange to avoid paying taxes now on the return, but only was able to find that it applies if you sell a property.

Recently I applied for pre-approval in order to start looking for small multi-family units to do an owner occupied house hack, I was, unfortunately, denied pre-approval due to my low income.So I had an idea and I was wondering if this is 1) Legal/Feasible 2) Effective/Smart or Not.

In fact, the last three rentals of mine that came up for renewal in the last year had new tenants apply, background checks completed, and first months rent + security deposit paid sight unseen.

The eviction process should still apply as they need to move the unit off the lot.

We had to get quotes from 7 or 8 painters before we found a reasonable one to paint our house.But, there are different ways to add value. 

I hate to use this statement but it applies here. 

Math, Psychology, English, Law, Physics (as it applies to such things as structures, etc.)As a boost to general life skills add logic and history.