Now starting to wonder if continuing to rent while investing in an out-of-state market would even be a better option!

But the short answer is there likely is a way to meet you objectives while completing a 1031 exchange which also preserves your option in the future to continue to exchange real estate.  

@Parker Smith There is a lot that can come into play here.

Ultimately we decided to continue pursuing this deal as the overall numbers are still excellent.

I don’t know what kind of numbers your looking at with each of these and how much money you need to put back in play but the refinance money you will receive will be tax free and the LOC will have interest when you use it.

I don't think I've ever seen a sales commission of 25%.I saw this same scenario played out recently. 

You may want to consider that the interest rates are continuing to creep up, and in 6 months they may be higher than they are now as a result you may want to hold out a bit longer on the refi. make sure that the deal at whatever rate you choose meets your financial objectives just incase you cant refi for whatever reason at the time that you initially projected.   

You can think about putting that into a high interest savings account or maybe an ETF to let it grow a bit, while you achieve 1&2, and continue to save.Your on the right track by asking questions.

Ways to mitigate the risk is to continue strong communication with contractors with weekly status updates.

That's not meant to dissuade you, this is a long term play - buy and hold!