The home is 2,300 square feet and has an addition on the back that was not touched. 

So its not a additional amount I have to pay.

With no income...just cost.How many months would it take to recover $60k...which is what you need to do before you show any profit...and before you mention appreciation, you get the same appreciation whether you pay this way or the minimum.At $18k/y cf (after payoff), it will take you over 3 additional years before you start making a profit...that's actually close to 8 years from when you start the early payoff.B - If you put 20% down (about $24k), that was cash, and you had positive cf (on average) for the full term (let's say 20 more years), the cost of this property to you was $24k.If you had $500 positive CF without doing this early payoff, or $6k/year, you would have broken even at the end of year 4...and you would be profiting.Let the tenant buy the house for you. 

Additionally, I would like to finance this deal with conventional financing if possible. 

The cost and additional income is included in calculations.

In addition, both buildings were slapped with fines due to garbage which the property management company not only failed to clean up, but failed to notify me. 

Also, be mindful that with new law change of allowing the 1031 exchange only for the real properties, the cost seg might be harmful depending on if you want to ever do 1031 exchange.

The attorney/title company may request something additional. 

I live overseas so it has added some complexity and additional time to the process. 

The entire exchange period is only 180 days so the max your money will be tied up is an additional 135 days.And there's another silver lining - depending on how the dates line up your 180 days may not end until 2019.